Financial Structure Of Monetary Institutions And Liquidity Of Economy

The author's researches show that Croatian monetary system has internal distortions which are the consequence of institutional solution of financing the changes of property balance during the process of privatization. Such distortions are permanent obstacle to development of financial market and dispersion of financial forms, as the basis for reduction of money role on one side, and actualization of role of non-money forms in financing economy on the other side. From this point of view it justly imposes the statement about the big influence of monetary system upon existing Croatian circumstances as regards illiquidity of economy. In regard to weak dispersion and confidence in non-money financial forms, development of illiquidity solution should be further directed to temporary actualization of those solutions which necessarily lead through channels of monetary system. In this connection inflation is not necessity, as it is not necessity the change of exchange rate and extremity as regards monetary sovereignty. After all it is known in monetary practicing, that there is bad money and big monetary sovereignty or good money and small monetary sovereignty. Unfortunatelly, what money we have depends less upon the issue money of central bank and more upon balances of commercial banks as the pan of monetary system. Thus, discussion in this paper is oriented in this direction.