Goran Varat
Episode · #531
RITAM POSLA Goran Varat
Guest Goran VaratHosted by Lidija KiseljakMay 3, 2026
Goran Varat
About this episode
What you'll hear in this conversation
The recent collapses of Silicon Valley Bank and Credit Suisse have rekindled old anxieties about the stability of the global financial system. Are these isolated incidents, or the first tremors of another widespread banking crisis? Goran Varat, a Board Member for Finance at Podravska Banka, brings a rare dual perspective to this question. Having worked in both commercial banking and in the central bank's supervisory sector, he dissects the specific failures that led to these events, and offers a clear view on the role of regulators and central banks when stability clashes with the imperative of fighting inflation. You'll finish this conversation with a sharper understanding of how financial systems truly absorb—or fail to absorb—stress.
Insights from the conversation
What to take from this episode
01
Silicon Valley Bank's downfall wasn't due to risky assets, but a fatal mismatch: over 53 percent of its portfolio was in government securities, while its liabilities were highly concentrated, volatile deposits from the tech sector. The lesson is that a bank's risk profile is defined not just by what it owns, but by the stability and concentration of the money it holds.
02
Even after a decade of tightened regulation post-2008, the SVB collapse reveals how regulators can miss clear signals. Goran Varat, who once worked in central bank supervision, finds it 'very strange' that a bank could ignore liquidity and interest rate risks for so long, suggesting that deregulation and a lack of on-site vigilance were critical oversights.
03
Periods of expansive monetary policy are like a river in flood: everything looks calm and prosperous on the surface. But as the 'water recedes' with rising interest rates, poorly managed banks and 'zombie companies' are exposed, revealing all the 'wreckage and trash' that was hidden beneath. Easy money masks problems; tight money reveals them.
04
Credit Suisse didn't collapse overnight; it was a slow accumulation of ignored warnings. The bank faced years of investment losses, numerous AML violations, reputational damage from clients with criminal records, and a loose lending policy that resulted in high non-performing loans. When you see a bank financing itself at nine to nine-and-a-half percent, as Credit Suisse did, the market is already signalling deep distress.
05
The regulatory decision to write down 17 billion dollars in Credit Suisse's risky bonds to zero, while still paying three billion Swiss francs to shareholders, was controversial. Goran Varat argues this inverted the typical hierarchy of claims, where bondholders are usually ahead of equity holders. Such moves can complicate future risk pricing for investors.
06
Despite global banking jitters, Croatia's banking system stands out as highly capitalized, regulated, and liquid. With an average capital adequacy ratio of 24 percent and a liquidity coverage ratio (LCR) of 214 percent (compared to a European average of 170 percent), the domestic system shows significant resilience, proving that local strength can exist even amid international uncertainty.
07
When facing banking instability, central banks grapple with whether to pause interest rate hikes. Goran Varat argues that the European Central Bank was right to continue raising rates, viewing inflation as a 'snowball' that can become an 'avalanche' if not addressed. Preventing inflation, he says, is more important than making compromises to save over-leveraged companies.