The Slovenia Times

Nominee promises transparency if appointed C-bank governor


Dolenc, who has been serving as the acting governor since the previous governor Boštjan Jazbec left to take a job on the EU's Single Resolution Board in May, was nominated by President Borut Pahor although consultations indicated that he does not enjoy the necessary absolute majority in parliament.

Listing his personal goals, which are also the central bank's strategic goals, he emphasized the need for the central bank to detect macroeconomic challenges on time, exercise enhanced oversight of the financial system, have an active role in the Eurosystem, to be effective and to gain more trust from the public.

Touching on the issue of oversight of Banka Slovenije and of the bank bailout in late 2013 and 2014 as part of which junior bondholders and shareholders were wiped out, two issues of particular interest to the public, Dolenc called for respecting the rule of law.

"I advocate transparency at Banka Slovenije and suitable oversight," the nominee said, adding that oversight had already been put in place through the bank's reporting regularly to both chambers of parliament, an independent external audit and potential oversight by the Court of Audit.

The Court of Audit may scrutinise the correctness and economics of the central bank's operations even now, "and I would like for the court to start fulfilling this mandate".

However, the court cannot audit the correctness and economics of the central bank's supervision until November 2014 because the Constitutional Court has stayed that part of the law pending its final decision.

Dolenc said that "the current line-up of the Banka Slovenije Governing Board had not been asked about the topic beforehand", but it was acquiring a legal opinion as to what it could do in the case.

Since he took over from Jazbec in May, other court procedures involving Banka Slovenije are being examined.

In the case of the challenge concerning scrutiny by the Court of Audit, the central bank's current board is looking into legal consequences of withdrawing the petition addressed to the Constitutional Court by the previous board. "Once we are convinced one or the other decision is correct, we'll take it.

Commenting on the bail-in of junior creditors at the nationalised banks, Dolenc said it was necessary for parliament to pass a law after being instructed by the Constitutional Court to amend legislation by mid-May 2017 so as to give the wiped-out creditors an effective legal remedy.

"I'd like to call on MPs to give priority to this matter," Dolenc said, offering the central bank's assistance and support. He believes that once the law is passed, dialogue may be established as part of legal proceedings: "But this will depend on what the law that is adopted will be like."

Asked about his being seen in public meeting with certain public figures, Dolenc said he was in favour of openness at the central bank and for discussing with various stakeholders.

"It wouldn't be right to have our decisions shut between the four walls and to take decisions only on the basis of information from support services. At times, I exchange views with external experts or stakeholders."

Asked about the planned privatisation of the banks NLB and Abanka, he said: "This is always up to the owner", but added that Banka Slovenije was involved in the oversight, along with the European Central Bank.

His position, however, is that the state should fulfil the commitments made for the two banks, in particular because the two banks are under the pressure of European Commission's measures, which he said were a drag on their operations.

Dolenc believes banks in Slovenia are in good shape and there is no major risks in the system. "I'm not concerned about the banks' prospects in the short and mid terms, but I'm worried about the business model, that is about what they do in the future, about revenue risk ... Given a high growth in the coming years, we might see overheating."

Dolenc praised cooperation with the other Banka Slovenije vice-governors. If he is endorsed as the governor he plans to continue with the reorganisation and streamlining of Banka Slovenije.

The central bank employs about 440 people, and the board has already endorsed rationalisation and reorganisation so that part of the top-management structures will be removed to reduce decision-making time.

Dolenc said that in his current capacity he had all the powers in Slovenia, but not in voting at the ECB. This is not a problem, because votes are rarely taken, but every time he comes to an ECB session he is asked when Slovenia will get a governor. He believes lengthy procedures may undermine the country's reputation.

While Pahor has been highlighting Dolenc's competences, reactions by parties today confirmed things could get complicated.

Dolenc seems to have the support of the SocDems, the Pensioners' Party (DeSUS), the National Party (SNS) and the Modern Centre Party (SMC), which gives him 29 of the required 46 votes in the 90-member National Assembly.

The senior coalition Marjan Šarec List (LMŠ), which has 13 MPs, has been reserved about Dolenc and announced it would decide in the coming days.

New Slovenia (NSi), which has 7 MPS, said it would take a position during parliament's session on his appointment, while Dolenc is definitely without the backing of the Left, the Democrats (SDS) and the Alenka Bratušek Party (SAB).

SAB would allegedly like to see Igor Masten at the post and the Left Damjan Kozamernik, but Pahor said talks with parties showed none of the unofficial candidates enjoyed sufficient support.

Asked today whether the Modern Centre Party (SMC) could warm up for any other name, SMC deputy group head Igor Zorčič told the press that the party regrets "all this horse trading which is obviously already under way for this important staffing decision".


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