EN ECB -PUBLIC  
 
 OPINION OF THE EUROPEAN CENTRAL BANK  
of 25 March  2020  
on close cooperation between the E uropean Central Bank and Hrvatska narodna banka (HNB)  
within the Single Supervisory Mechanism , and on the macroprudential mandate and tools of 
HNB  
(CON/20 20/10) 
 
Intro duction and legal basis  
On 29 January 2020 the European Central Bank (ECB) received two requests from Hrvatska narodna 
banka (HNB) for opinions  on draft amendments to the Law on HNB (the ‘draft law on HNB’) and to the 
Law on credit institutions (the ‘draft  law on credit institutions’ , together with the draft law on HNB , the 
‘draft law s’)1.  
The ECB’s competence to deliver this  opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and the third and sixth indent s of Article  2(1) of Council Decision 
98/415/EC2, as the provisions of the draft laws addressed by this opinion3 relate to HNB , rules applicable 
to financial institutions insofar as they materially influence the stability of financial institutions and 
mark ets, and the ECB’s tasks concerning the prudential supervision of credit institutions pursuant to 
Article 127(6) of the Treaty . In accordance with the first sentence of Article 17.5 of the Rules of Procedure 
of the European Central Bank, the Governing Council has adopted this opinion.  
 
1. Purpose of the draft law s 
The provisions of the draft laws with respect to which this opinion is issued have three main purposes. 
First, the draft laws adapt  Croatian law to the provisions of Council Regulation (EU) No  1024/20134, 
Regulation (EU) No 468/2014  of the European Central Bank  (ECB/2014/17)5 and Regulation (EU) 
                                                 
1  HNB’s authority to consult the ECB is based on Article 39(1) of the Law on HNB, according to which HNB may 
require the Croatian Government to propose the enactment of laws concerning HNB and other matters to the 
Croatian Parliament. The Ministry of Finance is the sponsor of the draft laws, which were approved by the Croatian 
Government on 23 January 2020 and were delivered on the same day to the Croatian Parliament for the next steps 
in the legislative process.  
2  Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national 
authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).  
3  This opinion addresses those provisions of the draft laws that concern the establishment of close cooperation 
between the ECB and HNB within the framework of the Single Supervisory Mechanism, Croatia’s participation in the 
Single Resolution Mechanism , HNB’s macroprudential mandate and tools, and certain other provisions affecting 
credit institutions. The remaining provisions of the draft laws are addressed in a separate opinion.  
4  Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank 
concerning policies relating to the prudential supervision of credit institutions (OJ L 287, 29.10.2013, p.  63). 
5  Regulation (EU) No 468/2014 of the European Central Bank of 16 April 2014 establishing the framewor k for 
cooperation within the Single Supervisory Mechanism between the European Central Bank and national competent 
authorities and with national designated authorities (SSM Framework Regulation) (ECB/2014/17) (OJ L 141, 
14.5.2014, p. 1).  
ECB -PUBLIC  
2 No 806/2014 of the European Parliament and of the Council6 to provide for the establishme nt of close 
cooperation between the ECB and HNB within the framework of the Single Supervisory Mechanism 
(SSM) and for Croatia’s entry into the Single Resolution Mechanism  (SRM) . Second, the draft laws 
contain provisions concerning the macroprudential mandate and tools of HNB . Third , the draft laws 
contain provisions addres sing a range of matters affecting credit institutions, including restrictions on the 
remuneration of staff,  the outsourcing of business activities  and the exchange of information for purposes 
of assessing the creditworthiness of a credit institution’s clie nts and managing credit risks .  
 
2. The draft law  on HNB  
2.1 The draft law  on HNB regulates HNB’s  tasks within close cooperation with the ECB and 
participation in the SRM on matters including the issuance and withdrawal or revocation of 
authorisations and approv als, the adoption of other decisions,  the exercise of supervision and 
oversight in accordance with the laws governing the operation of credit institutions , and the 
exercise of resolution powers . It is envisaged that HNB will also adopt subordinate legislat ion 
regulating banking operations and establishing standards for sound and safe operation of credit 
institutions. These tasks are to be carried out by HNB within close cooperation with the ECB, or 
within the SRM , in accordance with EU law7. 
2.2 The draft law o n HNB provides that the HNB Council is to issue and revoke authorisations of credit 
institutions, authorisations for performing speci fic operations , authorisations for acquiring shares of 
credit institutions, approve mergers by acquisition, formation and other changes in the status of 
credit institutions , approve and revoke the approval of appointments of chairpersons and members 
of credit institutions’ management and supervisory boards , and decide whether a credit institution is 
failing or is likely to fai l, within close cooperation established with the ECB  and under the conditions 
governed by the Statute of the European System of Central Banks and of the European Central 
Bank or the legal acts of the EU, its institutions and bodies8. 
2.3 The draft law lays dow n the competences that HNB ’s Governor exercises within the framework of 
close cooperation with the ECB and HNB’s  participation in the SRM, including the regulati on of 
detailed conditions for and methods of exercising supervision, the procedure for taking m easures 
with respect to credit institutions and the conditions applicable to the resolution planning process9. 
2.4 The draft law makes provision for the imposition of administrative monetary sanctions in 
cooperation with the ECB, and for the cooperation of HNB  with the Single Resolution Board ( SRB)  
in the procedure of imposing penalties  when SRB exercises its powers to impose penalties10. 
2.5 The draft law provides that HNB is competent for the definition and implementation of Croatia’s 
macroprudential policy , for the purposes  of contributing to the stability of the financial system as a 
                                                 
6  Regulation (EU)  No 806/2014 of the European Parliament and of the Council of 15 July 2014 establishing uniform 
rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of 
a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No 1093/2010 (OJ L 
225, 30.7.2014, p. 1).  
7   See Articles 4 and 24 of the draft law on HNB (amending Article 4 and replacing Article 77 of the Law on HNB).  
8  See Articles 9 and 28 of the draft law on HNB ( amending Article 42(3) and Article 104 of the Law on HNB).  
9  See Article 10 of the draft law on HNB (amending Article 43 of the Law on HNB).  
10   See Article 26 of the draft law on HNB (introducing new Articles 87a and 87c of the Law on HNB).  
ECB -PUBLIC  
3 whole, acting in accordance with relevant EU legal acts . HNB ’s Governor is to implement 
macroprudential policy and adopt subordinate legislation, recommendations and decisions in the 
field of macroprudential policy11.  
2.6 The draft law provides that on the date of the introduction of the euro as Croatia’s official currency,  
or if after the establishment of close cooperation with the ECB this cooperation is terminated in 
accordance with Regulation (EU) No 1024/2013,  the relevant provisions of the Law on HNB which 
arise out of HNB’s close cooperation with the ECB cease to have effect12. 
2.7 Finally, the draft law provides that HNB will be independent in the performance of its tasks within 
the SRM conferred on it pursuant to Regulation (EU) No 806/2014, without prejudice to the powers 
of the Single Resolution Board (SRB) in relation to HNB13. It also gives HNB powers to adopt 
implementing acts providing for the application of SRB guidelines, subject  to the SRB’s approval14. 
 
3. The draft law on credit institutions  
3.1 The draft law on credit institutions empowers HNB to impose supervisory measures that may be 
required upon the completion of the comprehensive assessment performed by the ECB pursuant to 
Regulation (EU) No 1024/2013. HNB is to cooperate with the ECB in identifying significant credit 
institutions in Croatia on the basis of this comprehensive assessment and the requirements set out 
in Regulation (EU) No 468/2014  (ECB/2014/17)15. 
3.2 The draft law seeks  to ensure that, whenever the ECB exercises its supervisory powers concerning 
acquisitions of qualifying holdings in credit institutions , HNB cooperates  with the ECB in the 
decision -making procedure in order to ensure that joint procedures carried out with the ECB in the 
course of close cooperation may be applied mutatis mutandis  to supervised entities with  a head 
office in Croatia16. 
3.3 The draft law seeks to ensure cooperation with the ECB in the decision- making procedure 
concerning the prior approval and rev ocation of approval for management and supervisory board 
members. A credit institution’s management board is obliged to ensure that the credit institution 
operates, inter alia, in accordance with ECB regulations adopted under Regulation (EU) 
No 1024/201317. These provisions are necessary as the ECB does not have directly applicable 
powers over supervised entities and groups in Croatia during the course of close cooperation18. 
3.4 The draft law seeks to facilitate joint decision -making procedures in which  HNB takes a decision 
upon the instruction of the ECB on the authori sation of credit institutions’  provision of banking 
and/or financial services, mergers by acquisition or formation of new credit institutions, the 
                                                 
11  See Articl es 4, 10, 25 and 27 of the draft law on HNB (amending Articles 4, 43 and 89 and introducing new 
Article  77a of the Law on HNB).  
12   See Articles 34 (amending Article 118 of the Law on HNB) and 36 of the draft law on HNB.  
13   See Article 21 of the draft law  on HNB (introducing new Article 71a of the Law on HNB).  
14   See Article 21 of the draft law on HNB (introducing new Article 71b of the Law on HNB).  
15  See Articles 5- 6 of the draft law on credit institutions (amending Articles 11b- 11c of the Law on credit  institutions).  
16  See Articles 7- 11 of the draft law on credit institutions (amending Articles 24, 26, 27, 29 and 32 of the Law on credit 
institutions).  
17   See Articles 13- 15 and 17- 18 of the draft law on credit institutions (amending Articles 39, 41, 44, 46 and 47 of the 
Law on credit institutions).  
18  See Explanation accompanying the draft law on credit institutions, Articles 13, 15, 17 and 18, pp. 48- 49. 
ECB -PUBLIC  
4 granting, expiry and revocation of authori sations,  and the establishment of a branch in another 
participating Member State by a significant credit institution19. 
3.5 The draft law requires HNB to decide on changes to credit institutions’  internal models, the 
classification of capital instruments as additional tier 1 or tier 2 capital instruments, and a credit 
institution’s capital conversion plan in accordance with the ECB’s instructions20. The existing 
limitation of exposures to members of the same group or to a single person or group of connected 
clients, set at 25% of the credit institution’s eligible capital, is to  remain in force after the 
establishment of close cooperation21. As regards the assessment of recovery plans, HNB is to 
decide in line with ECB instructions22.  
3.6 The draft law envisages that credit ins titutions will continue to address all their applications, 
notifications or requests to HNB. An unannounced inspection of a credit institution’s business 
premises may only be performed by order of the High Administrative Court where such an order is 
reques ted independently by HNB or by the ECB, with HNB submit ting such requests on behalf of 
the ECB23.  
3.7 Whenever the ECB exercises and performs its supervisory powers and tasks, HNB as the 
consolidating supervisor must cooperate with the ECB in the decision- maki ng procedure for the 
approval of a financial support agreement for a group of credit institutions in Croatia and decide in 
accordance with the ECB’s instructions24. Provision is made for cooperation and decision- making 
according to the ECB’s instructions in  relation to supervisory measures in the early intervention 
phase25. Where  the ECB or a supervisory authority from a non- participating Member State is the 
consolidating supervisor, HNB may participate in the college of supervisors as an observer, and 
must a ct in accordance with the ECB’s instructions26. 
3.8 Under the draft law the provisions of the law governing the general administrative procedure apply 
to administrative procedures carried out by HNB. T he draft law on credit institutions establishes  the 
legal fr amework for the exercise of the right to be heard and to access file s. In particular, before 
adopting a decision that could adversely affect the legal rights of a party, HNB must notify the party 
of all facts, circumstances and legal issues relevant to the  adoption of the decision and invite the 
party to provide its comments in writing. Where HNB deems it appropriate, it may provide the party 
with the opportunity of commenting in an oral hearing. In addition, a party subject to a supervisory 
                                                 
19  See Articles 19- 23, 24 and 26- 27 of the draft law on credit institutions (amending Articles 60,  63, 65, 67- 69, 73 and 
75 of the Law on credit institutions).  
20  See Articles 34 and 38 of the draft law on credit institutions (amending Articles 114 and 143 of the Law on credit 
institutions).  
21  See Article 40 of the draft law on credit institutions (introducing new Article 145a of the Law on credit institutions). 
See also Article 493(3)(c) of Regulation (EU) No 575/2013 of the European Parl iament and of the Council of 
26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) 
No 648/2012 (OJ L 176, 27.6.2013, p. 1).  
22  See Article 41 of the draft law on credit institutions (introducing new Article 154a of the Law on credit institutions).  
23  See Article 44 of the draft law on credit institutions (amending Article 175 of the Law on credit institutions).  
24  See Article 49 of the draft law on credit institutions (amending Article 216b of the Law on credit institutions).  
25  See Article 53 of the draft law on credit institutions (amending Article 235a of the Law on credit institutions).  
26  See Article 56 of the draft law on credit institutions (amending Article 277 of the Law on credit institutions).  
ECB -PUBLIC  
5 procedure and a party against whom a procedure for imposing administrative sanctions has been 
initiated have a right to access the file27.  
3.9 Under the draft law HNB is competent for establishing breaches  and carrying out the procedure for 
imposing administrative sanctions and imposing administrative sanctions on legal persons and 
responsible persons for particular breaches of credit institutions28. As noted in the explanatory 
memorandum accompanying the draft law, i n accordance with Article 7 of Regulation (EU) 
No 1024/2013,  the ECB may give instructions that the HNB is obliged  to comply with. In exercising 
its powers under  Article 18 in conjunction with Article 7 of Regulation (EU) No 1024/2013, the ECB 
may instruct HNB to impose administrative sanctions. To enable HNB to comply with such 
instructions, HNB is given the power to impose administrative sanctions. The procedure by which 
HNB imposes administrative sanctions aims  to fulfil the requirements under close cooperation with 
the ECB . This includes t he types of administrat ive sanctions that HNB may impose at the request 
of the ECB29. The draft law introduces administrative disputes and judicial protection as the legal 
remedy against a decision on administrative sanctions. An appeal against a decision of HNB on 
administrative sanctions may be made before the Administrative Court in Zagreb, with such an 
appeal regarded as urgent30. The limitation period for imposing administrative sanctions and 
executing fines is five years31, in line with Articles 130 and 131 of Regulation (EU) No  468/2014  
(ECB/2014/17)32. Whenever the ECB exercises its powers, HNB is to cooperate with the ECB in 
the administrative sanctions procedure and comply with the ECB’s instructions33. In this respect, 
HNB must follow the same procedural requirements as appl y when it impos es administrative 
sanctions of its own accord34. 
3.10 Where certain provisions of the Law on credit institutions  are breached, a misdemeanour may be 
committed, the establishment and sanctioning of which falls within the competence of county 
courts . The draft law provides, in contrast, that HNB, and not the county courts, is to have the 
power to impose administrative sanctions in relation to certain breaches35. 
3.11 The draft law contains further provisions regulating HNB’s macroprudential mandate and too ls. In 
particular, where  necessary to safeguard the stability of the financial system as a whole, to 
strengthen the resilience of the financial system and to prevent and mitigate systemic risks, HNB 
as a designated authority must adopt subordinate legislat ion to set appropriate measures and 
instruments that may include: (1) the highest permitted ratio of the approved loan amount to 
collateral value; (2) the highest permitted ratio of the loan amount to the income of the loan 
                                                 
27  See Articles 62- 63 of the draft law on credit institutions (introducing new Articles 322a, 323a and 323b of the Law on 
credit institutions).  
28  See Article 65 of the draft law on credit institutions (introducing new Articles 359a to 359s of the Law on credit 
institutions).  
29  See Explanation accompanying the draft law on credit institutions, Article 65, pp. 56- 58. 
30  See Article 65 of the draft law on credit institutions (introducing new Article 359k of the Law on credit institutions).  
31   See Article 65 of the draft law on credit institutions (introducing new Articles 359m and 359n of the Law on credit 
institu tions).  
32  See Explanation accompanying the draft law on credit institutions, Article 65, p. 58.  
33   See Article 65 of the draft law on credit institutions (introducing new Article 359s of the Law on credit institutions).  
34  See Explanation accompanying the draft law on credit institutions, Article 65, p. 56.  
35  See Article 66 of the draft law on credit institutions (amending Article 360 of the Law on credit institutions); 
Explanation accompanying the draft law on credit institutions, Article 66, p. 59.  
ECB -PUBLIC  
6 beneficiary; (3) the highest permitted  ratio of the amount of loan instalment repayment or annuity to 
the income of the loan beneficiary; (4) the maximum duration of the loan agreement; (5) the 
requirements related to the loan repayment calculation method; or (6) other measures and 
requi rements aimed at safeguarding the stability of the financial system as a whole and preventing 
and mitigating systemic risks36. Further, HNB is the designated authority responsible for setting the 
countercyclical and systemic risk buffer rates for Croatia for the purposes of Articles 133(2) and 
136(1) of Directive 2013/36/EU  of the European Parliament and the Council37 and must also set 
other systemically important institutions ( O-SII) buffer rate. In these cases , HNB carries out these 
macroprudential tasks together with the ECB, and follow s the ECB’s instructions38. 
3.12 The draft law contains provisions prescribing the ratio between the fixed and variable components 
of the total remuneration of a staff member of a credit institution and restricting the type and des ign 
of instruments in which variable remuneration may be awarded39. 
3.13 The draft law amends existing provisions concerning credit institutions’ outsourcing of business 
activities, prescribing in more detail the content of subordinate legislation that HNB may a dopt on 
outsourcing40. 
3.14 The draft law removes legal impediments to the exchange of confidential information necessary for 
a credit institution to assess a client's creditworthiness and manage credit risk, ensuring the 
compliance of such information exchanges  with banking secrecy, data protection and other legal 
requirement s. These changes are proposed following the discontinuation of the exchange of 
information on the credit obligations of citizens by the Croatian Registry of Credit Obligations in 
201841. 
 
4. Observations regarding c lose cooperation between HNB and the ECB  within the SSM  
4.1 The ECB welcomes the draft laws as an important step in the process leading to the establishment 
of close cooperation between the ECB and HNB pursuant to Article 7 of Regulation ( EU) 
No 1024/2013.  
4.2 The ECB notes that it has already been consulted, and issued an opinion, on a first piece of 
Croatian legislation adopted for the purpose of establishing close cooperation42. 
4.3 This opinion is without prejudice to the overall assessment of the request filed on 27 May 2019 by 
the Republic of Croatia to establish close cooperation between the ECB and HNB, which is taking 
                                                 
36  See Article 39 of the draft law on credit institutions (introducing new Title VIIa -  Macroprudential measures and 
Article  144a of the Law on credit institutions).  
37  Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on acc ess to the activity of 
credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 
2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ L 176, 27.6.2013, p. 338).  
38  See Articles 35- 37 of  the draft law on credit institutions (amending Articles 119, 129 and 137 of the Law on credit 
institutions).  
39  See Article 30 of the draft law on credit institutions (introducing new Articles 100a and 100b of the Law on credit 
institutions); Explanation accompanying the draft law on credit institutions , Article 30, pp. 50- 51. 
40  See Articles 31- 33 of the draft law on credit institutions (amending Articles 109- 111 of the Law on credit institutions); 
Explanation accompanying the draft law on credit institut ions, Articles 31- 33, p. 51.  
41  See Articles 42 and 61 of the draft law on credit institutions (amending Articles 157 and 321 of the Law on credit 
institutions); Explanation accompanying the draft law on credit institutions , Articles 42 and 61, pp. 52 and 55.  
42  See Opinion CON/2019/25. All ECB Opinions are published on the ECB’s website at www.ecb.europa.eu.  
ECB -PUBLIC  
7 place in line with the existing procedures established under Article 7 of Regulation (EU) 
No 1024/2013 and under Decision EC B/2014/5 of the European Central Bank43. In particular, this 
opinion remains without prejudice to the assessment being conducted by the ECB in accordance 
with Article 4 of Decision ECB/2014/5, which includes a broader assessment of the relevant 
national leg islation, also taking into account its practical implementation44. 
4.4 The ECB welcomes the comprehensive approach taken in the draft laws to the establishment and 
operation of close cooperation with the ECB. As previously noted, the ECB understands that the 
new provisions will be read in accordance with the other provisions of the Law on HNB and the Law 
on credit institutions, so that the exercise of prudential supervision over credit institutions 
established in Croatia will take place under the framework provi ded for in Regulation (EU) 
No 1024/201345. 
4.5 The ECB welcomes the establishment of a legal framework providing HNB with all necessary 
powers to comply with all the instructions which the ECB may adopt under Regulation (EU) 
No 1024/2013.  
4.6 The ECB welcomes the provisions enabling the ECB to carry out the tasks in the areas referred to 
in Article 4(1)  and (2) and Article 5 of Regulation (EU) No 1024/2013 once close cooperation 
between the ECB and HNB is established.  
4.7 The ECB welcomes the provisions ensuring that the common procedures laid down in Part V of 
Regulation (EU) No 468/2014 (ECB/2014/17) can be applied in respect of supervised credit 
institutions  during close cooperation.  Consistent with Regulation (EU) No 468/2014 (ECB/2014/17) , 
the draft laws provide for  the right of  a party to be heard before a decision that could adversely 
affect its rights is adopted46. However, the draft laws do not contain provisions on HNB’s powers 
and procedure in case of the adoption of an urgent decision necessary to prevent signi ficant 
damage to the financial system. The Croatian authorities are encouraged to align  the draft laws  in 
this respect with Article 31 of Regulation (EU) No 468/2014 (ECB/2014/17)  and provide HNB with 
all necessary powers to comply with all the instruction s which the ECB may adopt under Regulation 
(EU) No 1024/2013 in cases  of urgency .  
4.8 The ECB welcomes the fact that the draft law  on credit institutions introduces and specifies HNB’s 
sanctioning powers in order to align Croatian law with the scope of the EC B’s sanctioning power 
under Article 18 of Regulation (EU) No 1024/2013. In particular, the ECB welcomes the express 
requirement  for HNB to open proceedings for the imposition of administrative penalties when so 
requested by the ECB on the basis of Article 18(5) of Regulation (EU) No 1024/2013. The 
procedure by which HNB imposes administrative sanctions is harmonised with the procedure by 
which the ECB imposes administrative penalties under  Part X of Regulation (EU) No 468/2014 
(ECB/2014/17) . However, a provision should be added empowering HNB to impose sanctions on 
holding companies in the event that they breach decisions adopted by HNB pursuant to ECB 
                                                 
43  Decision ECB/2014/5 of the European Central Bank of 31 January 2014 on the close cooperation with the national 
competent authorities of participati ng Member States whose currency is not the euro (OJ L 198, 5.7.2014, p. 7).  
44  See paragraph 2.3 of Opinion CON/2019/25.  
45  See paragraph 3.1.1 of Opinion CON/2019/25.  
46  See Article 63 of the draft law on credit institutions (introducing Article 323a of  the Law on credit institutions).  
ECB -PUBLIC  
8 instructions  or act contrary to legal acts adopted by the ECB which are directly applicable in 
Croatia. Further on, the definition of total income for the imposition of administrative sanctions on 
entities belonging to groups should, in line with Article 128 of Regulation (EU) No 468/2014  
(ECB/2014/17) , take into account the consolidated annual financial accounts of the group 
irrespective of the place of establishment of the parent undertaking. Also, the provisions on the 
publication of decisions on administrative sanctions by HNB on its website should be amended to 
include all sanctions imposed on all subjects sanctioned by HNB upon the ECB’s  request . Further 
on, the exceptional ground provided for in the new Article 215(9)(4) of the L aw on credit institutions 
allowing for publication on an anonymous basis should not be applicable to HNB decisions 
imposing administrative sanctions upon the ECB’s  request, as it departs from the publication 
regime provided for in  Article 132 of Regulation (EU) No 468/2014 (ECB/2014/17) .  
 
5. Observations regarding HNB’s macroprudential mandate and tools  
5.1 The ECB understands that the part of the draft laws which relates to the macroprudential mandate 
and tools of HNB is to be adopted in line with  the commitments made by Croatia in policy areas 
which are of high relevance for a smooth transition to, and participation in, the e xchange rate 
mechanism  (ERM II)47. 
5.2 HNB is competent in the area of macroprudential policy for its contribution to the stability of the 
financial system as a whole48. Based on this competence HNB has already adopted a number of 
macroprudential  measures49. HNB is also the designated national authority for the purposes of 
identifying macroprudential or systemic risks under Article 458(1) of Regulation (EU) No 575/2013  
of the European Parliament and of the Council50. The draft law does not therefore confer genuinely 
new tasks on HNB, but rather specifies a more broadly formulated macroprudential mandate and 
certain new macroprudential tools that HNB may use when discharging its macroprudential 
responsibilities. Consequently, it is not necessary to assess whether the conferral of new tasks on 
a national central bank complies with the prohibition of monetary financing.  
5.3 The ECB welcomes the clarification of the details of HNB’s macroprudential toolkit. The objectives 
of the draft law are also in line with the principles set out in the Recommendation of the European 
Systemic Risk Board on intermediate objectives and instruments of macroprudential policy51, in 
particular with regard to the objective to mitigate and prevent excessive credit growth and 
leverage52. 
                                                 
47  See press release, ‘Statement on Croatia’s path towards ERM II participation’, 8 July 2019, available at 
www.consilium.europa.eu.  
48  See Article 4 of the Law on HNB.  
49  See HNB Recommendation for mitigating interest rate and interest rate credit risk in long- term consumer lending 
(26 September 2017) and HNB Recommendation on the procedure for granting non- residential loans to consumers 
(28 February 2019), available on HNB’s website at https://www.hnb.hr . 
50  See Article 11(2) of the Law on credit institutions ; Regulation (EU) No 575/2013 of the European Parliament and of 
the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending 
Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1).  
51  Recommendation ESRB/2013/1 of the European Systemic Risk Board of 4 April 2013 on intermediate objectives and 
instruments of macroprudential policy (OJ C 170, 15.6.2013, p. 1).  
52  See paragraph 2.2 of Opinion CON/2017/11, paragraph 2.3 of Opinion CON/2017/21, paragraph 3.1 of Opinion 
CON/2018/9 and paragraph 3.1 of Opinion CON/2018/52.  
ECB -PUBLIC  
9 5.4 From a financial stabili ty perspective, the ECB welcomes the implementation of a legislative 
framework for borrower -based measures. The ECB takes positive note of the fact that HNB may 
activate some or all of the abovementioned tools, as well as any other measures and requirement s 
aimed at safeguarding the stability of the financial system as a whole and preventing and mitigating 
systemic risks,  thereby responding in a flexible and proportionate way to potential risks to financial 
stability. A thorough quantitative impact assessment will be important to verify the effect and 
appropriateness of the new tools when they are activated53.  
5.5 The ECB expects HNB to consult the ECB in accordance with Article 127(4) of the Treaty on 
subordinate legislation that HNB adopt s under the draft law on credit institutions54.  
 
6. Observations regarding Croatia’s  participation in the SRM  
6.1 The ECB welcomes the provisions of the draft laws which allow for the implementation of 
Regulation (EU) No 806/2014 in relation to the SRM.  
 
This opinion will be published on the ECB’s website.  
 
 
Done at Frankfurt am Main, 25 March 2020.  
 
[signed]  
 
The President of the ECB  
Christine LAGARDE  
                                                 
53  See paragraph 2.3 of Opinion CON/2017/11, paragraph 2.4 of Opinion CON/2017/21, paragraph 3.2 of Opinion 
CON/2018/ 9, paragraph 3.2 of Opinion CON/2018/52 and the Governing Council’s statement on macroprudential 
policies of 15 December 2016, available on the ECB’s website at www.ecb.europa.eu.  
54    See paragraph 2.4 of Opinion CON/2017/11.