The changes, drafted by Banka Slovenije, allow the country's central bank to act already on the basis of its assessment that a certain bank is failing to control risks or is failing to do so in an appropriate manner.

"What is of key importance is timely and effective action already in the first phase of bank system risk prevention and not only when the situation needs to be fixed," Finance Minister Janez Šušteršič told MPs today, saying this were solutions that were proposed and already implemented in Europe.

Baka Slovenije will be able to appoint a special administrator and management at problematic banks and prohibit them from selling their assets, demand a reorganisation plan or order a compulsory sale of shares.

It will be able to call for recapitalisation by not only the owners, but also the owners of the owners and call assembly meetings to this purpose on a very short notice.

"This is also important in terms of solving the situation of banks in direct or indirect state ownership," the minister said.

The changes moreover introduce an exception to takeover rules in cases when a recapitalisation is ordered by the regulator. If such a recapitalisation results in the provider of capital exceeding the takeover threshold, they will be exempt for two years from the need to publish a takeover bid.

The opposition SocDems proposed extending this exception period to fiver years, the amendment however failed to get sufficient backing. In turn the SD withheld its support to the changes to the act, arguing among other things that the recommendations of the parliament's legal service had been ignored.

Meanwhile, Banka Slovenije will also be able to demand that the assets and commitments of a bank be transferred onto the takeover company. This provision will however only be implemented if the bad bank act is not rejected in a referendum.

What is more, the central bank will be able to directly dismiss supervisory board members and banks will be obliged to get its permission when obtaining qualified shares in financial companies.

All coalition parties argued strongly in favour of the changes, saying that Banka Slovenije had not done its job in the past.

"We feel that it carries the bulk of the responsibility for the poor situation in the banking system," Marija Plevčak of the Pensioners' Party (DeSUS) said.

Jožef Horvat of New Slovenia (NSi) was also critical, although acknowledging that the central bank had been limited in its possibilities by the existing legislation.

Andrej Šircelj of the Democrats (SDS) and Bojan Starman of the Citizens' List (DL) assessed that loans which will never be repaid because of bad management on the part of banks amounted to more than EUR 10bn.

The opposition Positive Slovenia (PS) criticised what they sees as a lack of a comprehensive plan for the salvaging of companies and banks, but they agreed that the changes proposed were worth adopting.