21:49 / 11.01.2022.

Author: Katja Miličić

Croatian National Bank denies executives traded securities illegally

Croatian National Bank Governor Boris Vujčić

Croatian National Bank Governor Boris Vujčić

Foto: HTV / HRT

Over the last 20 years, tens of employees of the Croatian National Bank traded in securities issued by the very same banks that the central bank oversees, the news website Index reported on Tuesday.

Index said it uncovered more than 400 transactions by Croatian National Bank (HNB) employees valued at more than 10 million kuna. Those who engaged in trading include current Governor Boris Vijčić and his deputy, Sandra Švaljek.

The National Bank responded with a statement saying that top executives had done nothing illegal. They sold any shares they had in banks before legislation that made it illegal came into effect, the HNB said. It also stated that under current Croatian law regulating the central bank, employees are not prohibited from trading in bonds issued by banks. Index argues that the trades are illegal under EU regulations.

Opposition MPs said this smacked of insider trading.

"Even if all these laws and European directives did not exist, this is still really morally wrong and completely inappropriate in every way. We expect the Governor and the Vice Governor as well as all of the members of the Council of the Croatian National Bank to resign," said Ivana Kekin, the leader of the New Left.

Arsen Bauk of the SDP said any investigation into this matter would likely come from the EU and not Croatian authorities.

"It is unacceptable that a person who controls something also trades in that very same thing. As far as other sanctions are concerned, due to the autonomy of the Croatian National Bank, any changes there should come from the bank itself. If that does not happen, then we are likely to have to wait until we adopt the Euro and the European Central Bank takes control, as was the case with the our State Prosecutor's Office,” Bauk said.

The HNB did tell Index that it planned to enact a rule barring employees from trading in bank issued bonds in 2022, citing that since 2013, when the HNB joined the European System of Central Banks, it had complied with nearly all EU directives except for this one.

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