[8] After his father's death in a traffic accident a year later, Ivo lived with his mother in New York City,[8] where he studied history at Fordham University, graduating in 1969.
[3] Although he was a member of Students for a Democratic Society, by his own account he was not attracted by the West Coast flower power movement of the late 1960s.
[8] While visiting Zagreb in 1971, he met Vlado Gotovac and Franjo Tuđman, who would both become major Croatian political figures after the fall of communism.
[8] Banac remained in close contact with Gotovac until his death in 2000;[8] on the other hand, he reportedly didn't think highly of Tuđman, describing him as a person who could not tolerate dissent.
He joined the Croatian Social Liberal Party (HSLS) and became one of the strongest critics of Franjo Tuđman and his government, especially with regards to policy towards Bosnia and Herzegovina.
He held that post for only a few months, until the SDP - the party with whom the LS was aligned - lost the election to a rejuvenated HDZ.
Banac also blamed World War II in Yugoslavia on the King Alexander dictatorship and stated that Communism caused much greater damage than fascism.