The Slovenia Times

Bad Bank With First Assets in Summer


There are no universal solutions for the concept of a bad bank, which requires "pragmatism and efficiency". The new government will not change the current concept of the bad bank, which is operational and can be changed later if necessary, he said at the presentation of the report.

His comments come after the Organisation for Economic Cooperation and Development (OECD) welcomed in its country review the plan to set up a bad bank, but warned in view of government plans to tweak the plan that lack of transparency and potential political interference pose risks.

The minister had previously said the bad bank would become operational by September, following changes to the regulations the government deems necessary.

Today he acknowledged that the analysis and debate phase had been too long. "It is time for action," he said.

Nevertheless, he expressed concern about the transfer of assets so diverse they will not be viable for effective restructuring. An appropriate classification needs to be made and teams for different groups of assets formed, he said.

Mejra Festić, a vice-governor of the central bank, explained that Banka Slovenije had produced several scenarios for the valuation of non-performing loans and their transfer onto the bad bank last year.

It needs to be made clear which scenario requires additionally recapitalising banks. The scenario needs to be selected based on exerting the minimum burden on public finances, she said.


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