The second phase comprises of structural changes in the economy. The last one should build up sound foundations f or reconstruction of the Croatian economy and start sustained economic growth path. The general economic and political uncertainty is affecting business policy of all commercial banks in Croatia . On top of the effects of the war, the economy is still burdened with old socialist legacy. This very unfavourable macroeconomic environment has to be taken into account when assessing banking in Croatia.
Financial markets are narrow and shallow.
With the long history of high inflation and socialist system this in of no surprise. A Money market and Stock exchange exist in Zagreb, but trading is very limited. Taken together, they are rather small intermediaries. Pension Fund, whose assets have increased with the privatisation process does not play an active role in intermediation of resources. The basic aim of this paper is to depict legacies, problems and prospects of commercial banks in Croatia.