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Banka Slovenije Drawing Up Measures to Tackle Bad Loans

Ljubljana, 10 July (STA) - Slovenia's central bank is drawing up a list of measures aimed at tackling bad claims and encouraging economic growth in cooperation with the government, the Bank Association of Slovenia and banks, Banka Slovenije said in a press release on Tuesday.

The central bank's information regarding risks in banks' loan portfolios is up-to-date and the bank has a clear picture of potential losses, the press release reads.

The central bank said it keeps constant track of banks' capital adequacy and the extent of risky investments and impairments.

"We expect the banks to speed up their activities to tackle bad investments and start providing loans to solvent clients," the bank noted, adding that all Slovenian banks were currently solvent.

However, "since the situation in the economy is deteriorating, we cannot rule out the possibility that portfolios will have to be cleaned up".

The banks must be shored up, and Banka Slovenije is ready to intervene should a bank require such a move, the central bank noted.

Banka Slovenije has drawn up a set of measures that could be implemented if legislation was changed to grant it powers comparable to those of regulators in other EU countries.

"We will do our part by the end of July and send our reports and proposals to the government," the central bank announced.

Banka Slovenije Governor Marko Kranjec told the national broadcaster RTV Slovenija on Monday that all banks were currently solvent, but the central bank was nevertheless concerned about the souring of their credit portfolios.

It is also too early to say whether Slovenia will have to request EU aid, but "this is a possibility if economic policies are not sufficiently stabilising", the governor added.

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