FINANCIAL SYSTEMS AND INTERNATIONAL CAPITAL FLOWS

Although national economies have territorial boundaries, during the 80s, a process of capital flows liberation began, which eliminated the boundaries of cross-border movements of the financial capital. This process irretrievably altered the financial systems of countries embracing this process, additionally influencing, to a large extent, the real economic activity of these countries as well.

Today, a large majority of countries in the world partly allow free movement of capital. The Institute of Economics, Zagreb is—within the research area Financial systems and international capital flows—engaged in research concerning the basic characteristics of the transitional countries’ financial systems and the influence these characteristics exert over real economic results. Within the financial system, special focus is placed on the stock market, government bond market and the banking system. Research is also focused on examining the price dynamics and interdependence of various types of financial assets, the process of euroization of the financial systems of post-transitional European countries and on the basic determinants and modalities of stock market functioning in Croatia.

Given the fact that Croatia, having liberalized its capital account during the process of EU accession, is also a part of the international capital market, the focus of interest of the researchers from the Institute of Economics, Zagreb also includes integration processes of the individual parts of the Croatian financial systems into global markets and the interconnection between Croatian and international capital markets.