Banking regulations and capital requirements shift in Montenegro and Croatia

In Montenegro, a draft amendment to the Consumer Credit Law introduces stricter requirements for banks regarding creditworthiness assessments. The proposed legislation mandates that creditors evaluate a citizen's ability to repay based on income, expenses, and other financial circumstances rather than relying solely on credit history. The draft also aims to prevent over-indebtedness by requiring banks to attempt to reach agreements with debtors before pursuing forced collection. Additionally, consumers will have the right to request human intervention if their credit assessment is performed through automated data processing.

In Croatia, the Croatian National Bank (HNB) is increasing capital requirements for banks to bolster financial stability. The countercyclical capital buffer rate is set to rise to 2.25 percent by October 1, 2027, up from the current 1.5 percent. This move comes as real estate prices continue to outpace income growth, with property prices rising 14.3 percent year-on-year in the first quarter of 2026. The HNB noted that while credit growth rates are slowing, the pressure on households remains high due to the gap between rising housing costs and stagnant wage growth.