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15 July 2013

Reuters: New Slovenia central bank chief says no need for bailout


Slovenia does not currently need international financial help to sort out its crumbling banking system although aid cannot be ruled in future, the eurozone country's incoming central bank governor said.

"Slovenia is still far from asking for international help", Bostjan Jazbec, new Slovenian central bank governor, said. He also said he hoped foreign direct investment in Slovenia would grow in the coming years as that would mean more economic stability for the country, where economic growth has been mainly based on foreign loans rather than on investment from abroad. Slovenian banks, mostly state-owned, are nursing some €7 billion of bad loans, fuelling concern that the former Yugoslav republic of 2 million could become the eurozone's next bailout recipient.

Jazbec said that he could not exclude the possibility of any troubled banks in Slovenia being closed down in future but that nothing like that was planned at present. "Such a possibility always exists. If the effect of a bank closure is bigger than keeping it up, then it is sensible to close such a bank", he said. But he added: "At this moment nothing like that is needed in Slovenia yet, there is still a possibility of a solution for all banks."

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© Reuters


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