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Economist Says Slovenia Should Keep Its Banks

Ljubljana, 15 November (STA) - Economist Franjo Stiblar presented in Ljubljana on Monday a book on the Slovenian banking sector in which he warns against the sale of Slovenian banks to foreigners.

Stiblar says in "Banking as a Backbone of Slovenia's Independence" that selling Slovenia's biggest NLB bank to foreigners would bury Slovenia's economic and financial independence and subsequently its political independence as well.

The banking sector should remain the backbone of the Slovenian economy. "Key business decisions at banks should be made by those who live in Slovenia," Stiblar told a panel held upon the launch of the book.

"We need to stop curving this backbone with bad business decisions and bad changes in the ownership and wider corporate structure."

The author is convinced that top officials are trying to prepare people for the sale of banks and state companies to foreigners through media. The state is trying to fill the budget gap by selling off the flagships of Slovenian economy, he believes.

Other countries are also protecting their banks, says Stiblar, who teaches economics, international banking and international business relations at the Ljubljana Faculty of Law. Old EU members never sold their banks in critical moments, he argues.

Banks should undergo gradual privatisation. State ownership is not the best solution, but until domestic companies gather enough capital it will have to do, Stiblar said.

He also noted that several countries, including the US, UK, Greece, Ireland, Portugal and Spain, had invested much more into their banks after the start of the crisis than Slovenia.

Stiblar and the critic of the book, economist Ivan Ribnikar, believe that at least one strong domestic banking group or financial conglomerate should be formed in Slovenia to support domestic companies while also allowing the existence of small specialised banks.

"We need to prevent domestic banks from becoming branches of foreign banks," Ribnikar said.

He also highlighted political independence of banks. Every time there is a change of power in the country, banks and companies undergo a hostile takeover, he said.

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