In the EU and within the Eurozone, new financial safety mechanisms are being established. This process is taking place at three levels. The first is at the macroeconomic and monetary level – including the implementation of the Fiscal Pact, reform of the ECB instruments and establishment of the ‘European IMF’ - the European Stability Mechanism (ESM). The second level is the banking union, with joint control of banks, insuring deposits and a system for resolving problems in banks in difficulty. The third level is prudential and concerns the implementation of new regulations Basel III and other regulations concerning bank operations.

This analysis gives a detailed overview of the new regulations and institutional mechanisms that have already been adopted, like those still under debate but with a great likelihood that they will soon be adopted. With regard to Croatia’s upcoming entry into the EU, the analysis deals with the significance of these changes for Croatia. The conclusion is that these new institutions represent good news for Croatia: the assessed benefits from the new financial safety mechanisms are much greater than the possible financial costs that Croatia will have after accession and later, after introducing the euro.