Liquidation of “bad banks” in Slovenia under question

Liquidation of “bad banks” in Slovenia under question


Review by Christos T. Panagopoulos

Slovenian business daily newspaper “Finance” says in Monday’s commentary there are several major questions open in the wake of the central bank’s decision to wind down the ailing Probanka and Factor Banka.

On Saturday, the European Commission welcomed the government’s decision to wind down two small troubled banks, expressing “full support” to the authorities, a European Commission source told the STA.

“The government and the central bank have done the right thing, a necessary step in the process of consolidation of the bank system”, the source said in response to the decision of the Slovenian authorities to conduct supervised liquidation of Factor Banka and Probanka.

The two banks, which together hold around 4% of the market, have been struggling for a while and they were not capable of functioning normally. This is not a measure that brings Slovenia closer to a financial aid program, the source added.

On the contrary, it is a “positive signal” that the Slovenian authorities are tackling the bank system problems in an orderly manner and in close cooperation with the European Commission.

Sources: STA, Slovenia Times