The Croatian Banking System
This paper provides an analysis of the stability of the Croatian banking sector. After the banking crisis of 1998, the Croatian banking system underwent a deep transformation process; foreign investors gained a dominating market share of more than 90% of total assets, with Austrian banks holding 43% thereof. Compared to other Central and Eastern European countries (CEECs), the degree of banking intermediation is relatively high in Croatia. In recent years, lending to the private sector and in particular to households has risen whereas lending to the general government has declined. Foreign currencies continue to play an important role in the Croatian banking sector, in particular on the liabilities side of banks balance sheets. While maintaining a large negative net foreign currency position on their balance sheets (with an increasing portion of net liabilities to nonresidents), Croatian banks overall net foreign currency position seems to be marginally positive. Still, foreign currency(-indexed) lending represents a credit risk as it entails an indirect exchange rate risk. Asset quality, by contrast, has improved significantly over the past five years, the capital adequacy ratio is on a relatively high — albeit declining — level, and real return on equity (ROE) is now as high as the profitability levels observed in other CEECs.
Croatia: Coping with Rapid Financial Deepening
The Croatian banking sector underwent sweeping structural changes in the late 1990s and has remained relatively stable and profitable since then. Driven by brisk credit growth, financial deepening has continued rapidly in recent years, with the level of bank intermediation now being among the highest in Central, Eastern and Southeastern Europe. With regard to financial stability, relatively high credit and foreign exchange risks would appear to constitute the main challenges. However, the most recent slowdown in domestic credit growth and the sector’s relatively high shock-absorbing capacities, as indicated by quite high profitability and capitalization levels and the strategically oriented presence of foreign banks, help mitigate risk concerns. Yet, the increasing debt burden of both households and corporates requires careful monitoring.
Pyrite multiple-sulfur isotope evidence for rapid expansion and contraction of the early Paleoproterozoic seawater sulfate reservoir
Abstract Earthʼs oxygenation is often described in terms of two unidirectional steps at the beginning and end of the Proterozoic Eon, separated by a long-lived intermediate redox state. Recent work defines a more complicated path to oxygenation, exemplified by an apparent drop in oxidation state following the early Paleoproterozoic Lomagundi carbon isotope excursion. The timing of this proposed drop in oxidation state is not well constrained, and it is not clear how it relates to redox conditions during the remainder of the Proterozoic. Here we present a study of pyrite multiple-sulfur isotopes, supported by Fe speciation and organic carbon isotopes, from early Paleoproterozoic black shales. We find evidence for the rapid expansion of the seawater sulfate reservoir during the Great Oxidation Event at ca. 2.3 Ga followed by a subsequent contraction in the size of the seawater sulfate reservoir at ca. 2.05 Ga. This scenario is consistent with the emerging view of a rise and fall in surface oxidation state during the early Paleoproterozoic. Comparison of our new data to other records of the seawater sulfate reservoir suggests that the elevated sulfate concentrations that characterize the early Paleoproterozoic did not return until the late Neoproterozoic.