Press release from the meeting of the Governing Board of the Bank of Slovenia on 20 December 2011
1. The Governing Board of the Bank of Slovenia discussed the report Stability of the Slovenian Banking System for December 2011, and approved its publication on the Bank of Slovenia's website.
The negative economic growth in the third quarter of 2011 indicates that expectations of a sustained period of low economic growth in Slovenia could be realised. The following factors are affecting economic conditions in Slovenia:
- (a) extremely tight conditions on the international financial markets. Slovenia was more dependent on the aforementioned conditions in autumn 2011 than at the end of 2010 owing to growth in net liabilities to the rest of the world, tightened financing conditions, and the downgrading of Slovenia and certain banks;
- (b) the over-indebtedness of the sector of non-financial corporations in Slovenia;
- (c) the low capital adequacy of the Slovenian banking system compared with the euro area, the rising proportion of bad loans and a decrease in the overall volume of loans; and
- (d) the non-competitiveness of the Slovenian corporate sector and the excessively slow implementation of structural reforms.
The stability of the Slovenian banking system deteriorated over the first three quarters of 2011 owing to a continuing rise in credit and income risks, and refinancing risk. Negative shifts were also seen in interest-rate risk, while liquidity and currency risks were virtually unchanged. An additional offer of three-year, long-term refinancing via the ECB will also have a favourable impact on mitigating liquidity risk.
2. The Governing Board of the Bank of Slovenia adopted the following regulations:
- Regulation amending the Regulation on the Reporting of Certain Facts and Circumstances of Banks and Savings Banks; and
- Regulation amending the Regulation on the Reporting of Capital and Capital Requirements of Banks and Savings Banks, together with the Guidelines for the Electronic Submission of Reports on Capital and Capital Requirements.