Commission approves Slovak bank support scheme – potential beneficiaries include subsidiaries of foreign financial institutions

09 December 2009

Slovakia committed to implement state capital contributions and state guarantee measures only during a maximum period of six months after scheme’s approval by the Commission. The measures provide safeguards to prevent the aid from being misused.

In order to counteract ongoing turbulence in financial markets, Slovakia intends to provide a package of measures to maintain the stability of the domestic financial system and to mitigate the spill-over of the global financial crisis from the banking sector to the real economy. The package consists of two different measures: capital injections and guarantees.

The potential beneficiaries of the aid are systemically relevant banks incorporated in Slovakia, including subsidiaries of foreign financial institutions.

The Commission found that the scheme will contribute to maintaining the stability of the financial system in Slovakia. The measures are well-designed and provide safeguards to prevent the aid from being misused. For example, the bank cannot advertise the state support; there will be dividend bans and management remuneration reductions.

The capital injections and guarantees are adequately priced. The remuneration for capital injections increases over time. This is an incentive for banks to reimburse the capital to the state as soon as possible.

Slovakia committed to implement state capital contributions and state guarantee measures only during a maximum period of six months after approval of the scheme by the Commission. Slovakia also committed to report to the Commission on the implementation of the scheme every six months.

Press release

© European Commission