The new arrangement will supersede the current system of deposit guarantees, which is based on an ex post system under which surviving banks are required to cover the deposits of a bank in default and the sate provisionally covers any shortfall.

The legislation, which transposes the EU deposit guarantee schemes directive, envisages a single system for deposit guarantees with obligatory membership for banks headquartered in Slovenia and third-country banks with subsidiaries here.

Deposits in banks will continue to be covered up to EUR 100,000, or higher in the event of specific claims.

In line with the EU rules, the payout deadline will gradually get shortened until 2024 to seven from what are currently 20 working days.

Banks will pay annual contributions into the fund, which will depend on their individual risk profiles.

The EU directive sets as the minimum target level 0.8% of the total amount of all guaranteed deposits in banks in Slovenia and 2024 as the deadline for this.

If the funds thus secured do not suffice to fully cover the guaranteed deposits, Banka Slovenije will be able to demand exceptional contributions from banks, approve an exceptional liquidity loan to the fund, or have the fund take out a loan with funds of other EU member states.

The changes follow the EU deposit guarantee schemes directive, which aims to improve the protection of deposits and is a pre-condition for the future use the controversial European deposit insurance scheme recently proposed by the Commission.

The law was adopted unanimously but only with the votes of the coalition. The opposition abstained arguing that the solutions are too vague.