MACROECONOMIC AND MICROECONOMIC CAUSES FOR THE INSTABILITY OF BANKS

Banks are treated as "half-public" institutions, realizing the interests of their owners but at the some time also realizing important public tasks and social goals. The trust of the public, the allocation of the national saving under rational criteria, appropriate crediting criterions, price effectiveness and a systematic risk management in business activities are the basic preconditions for a stable and profitable business operation of a bank. However, taking over risks, in banking cannot be entirely avoided An inadequate risk management, influences of various macro and microeconomic factors are cause of losses whose accumulation infallibly leads to a banking crisis. The regulatory and supervisory authorities have never been able to completely prevent the appearance of banking crises, which then, as situations when the bank's liabilities surpass the market value of its assets, lead to a decrease in the value of its assets (capital and claims) in relation to its liabilities and a decrease of the net value of the bank. Although once a rare phenomenon, banking crises became more frequent during the 1980es and 1990es, affecting the banking systems of both developed and developing economies (examples of Chile, Argentina, Poland, Spain, USA, Japan and other countries). The Croatian banking system has been through similar crises, while at the same time undergoing the process of banks privatization. There already is some experience but the consequences of the crises and privatization are only just appearing so that further analysis is useful also from a wider social point of view.