Croatian National Bank warns of rising financial risks and possible stricter bank rules

The Council of the Croatian National Bank (HNB) warned that systemic financial risks are increasing and said that if the trend continues the central bank may tighten macro‑prudential measures for banks and consumers. The board highlighted heightened interest‑rate risk stemming from a surge in household debt and a prolonged period of fast‑rising house prices, noting that exposure to systemic risk remained moderately elevated through the first half of 2026, driven mainly by rapid credit growth in the private non‑financial sector and soaring residential property prices. It cited external triggers such as geopolitical instability, war, and high equity‑market valuations. To curb further risk buildup, HNB reminded that from July 2025 consumer‑credit criteria will be restricted and that from 2027 banks must raise the counter‑cyclical capital buffer to 2 %. The bank also warned that rising protection costs could push banks toward variable‑rate loans after an initial fixed‑rate period, a move that could be risky for both borrowers and lenders.