The Croatian Financial Services Supervisory Agency published its Macroprudential Risk Scanner for the third quarter of 2025, assessing systemic risks in the financial services sector as remaining elevated. Elevated inflationary pressures and continued growth in real estate prices were identified as the main sources of risk, with interest rate risk highlighted as a dominant channel for potential spillovers, particularly to fund portfolios. Financial markets recorded relatively positive trends, with reduced volatility and low risk premiums supporting asset growth and stable returns for domestic funds while liquidity remained satisfactory. At the same time, geopolitical tensions and the risk of sudden shifts in market sentiment were flagged as potential sources of instability, especially given signs of overheating in parts of equity markets; stable capital positions of insurers and leasing companies were noted as supporting sector resilience. The report also focuses on money market funds, which have become the largest category of investment funds on the domestic market in just over two years as investors increasingly view them as close substitutes for bank deposits, while emphasising that they do not guarantee preservation of invested capital and can still involve low but real risks of loss.

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