Bloomberg: Betray Your Bank Before Your Bank Betrays You
bloomberg.com/news/2013-03-2 … cmpid=view
What’s a Slovenian with several hundred thousand euros in the bank supposed to do? Spread it out among at least a few different banks, that’s what. Or move the money out of the country, while it’s still possible.
Imagine what must be on the minds of any savvy depositors still left at Nova Kreditna Banka Maribor d.d., now 79 percent- owned by Slovenia’s government. It was one of only four lenders in October that failed the European Banking Authority’s latest capital-adequacy test, a ritual best known for how lax its standards are. One that flunked was Bank of Cyprus Pcl, where uninsured depositors face 40 percent losses as part of the country’s bailout terms. Another was Cyprus Popular Bank Pcl, also known as Laiki Bank, where uninsured deposits will fare far worse and the bank is being shut.
Slovenian bank also owes money to Bosnian and Croatian citizens that had their sawings in what was before Ljubljanska banka. I think the case is still in court but if I am not mistaken its nearly 500 million $ with interest that they will need to pay once the case is finished.
That will also have impact on their fragile economy.
Bloomberg: Slovenia’s new central bank governor inherits a financial system rife with bad debt that is threatening to push the country into becoming the sixth euro member to ask for an international bailout.
businessweek.com/news/2013-0 … rt-bailout
Slovenian banks such as Nova Ljubljanska Banka d.d. and Nova Kreditna Banka Maribor d.d. have been hit by the recession and the collapse of the construction industry, the pre-crisis driver of growth. Bad loans account for about a fifth of economic output.
Nova Kreditna, which had a 205 million-euro loss last year, was one of four banks that failed last year to meet European capital targets set by regulators. Bank of Cyprus Pcl, Cyprus Popular Bank Pcl, known as Laiki Bank, and Italy’s Banca Monte dei Paschi di Siena SpA (BMPS) were the others. Laiki was closed as part of the island nation’s bailout.
Nova Kreditna fell to a record low in Ljubljana, plunging 14 percent to close at 65 euro cents. The bank lost 81 percent of its value in the 12-month period.
The government must “show it’s serious”
Bank of America: Slovenia May Need $10B Bailout, Deposit Haircuts a Possibility
valuewalk.com/2013/04/sloven … lity-baml/
Slovenia is now in focus after the ‘botched’ bailout of Cyprus. Unfortunately, things are not looking great in Slovenia right now. BAML thinks that the country could require a bailout just shy of the original $13 billion bailout planned for Cyprus, and that haircuts on deposits cannot be ruled out.
Slovenia Working ‘Day and Night’ to Save Their Banks.
google.com/hostednews/afp/ar … 4f402d.451
Slovenia’s new Prime Minister Alenka Bratusek insisted Tuesday that her government is working “day and night” to save a banking system which the OECD says is in urgent need of repair.
Bidding to avoid her country becoming the debt-riddled eurozone’s sixth bailout recipient, Bratusek met European Commission President Jose Manuel Barroso for talks on economic reforms and measures that already resemble conditions applied in previous bailouts.
However, both Bratusek and Barroso rejected attempts to compare the former Yugoslav state to Cyprus, the most recent and controversial bailout where bank depositors were hit with a near unprecedented levy to help pay for the rescue.
“Literally, day and night we are dealing with this problem,” said Bratusek, her country’s first female prime minister who had been in charge of the budget at the finance ministry.
****“Absolutely we are trying to save our banking system,” ****she added.
AFP: ‘Urgent’ OECD warning on Slovenian banks
google.com/hostednews/afp/ar … e6de81.4e1
The OECD sounded the alarm Tuesday over the huge volume of bad debts strangling Slovenian banks but said that there was no immediate prospect of the country becoming the latest eurozone member after Cyprus to need a bailout.
“Restoring the banking sector is the most urgent priority,” the Organisation for Economic Co-operation and Development said in a report.
The OECD said important reforms and ambitious fiscal consolidation measures had already been adopted but warned that they relied “too heavily on temporary steps, across-the-board cuts in the public sector.”
Slovenia to Test Debt Appetite as Financing Pressure Mounts
bloomberg.com/news/2013-04-1 … ounts.html
Slovenia’s government failed to raise 100 million euros ($131 million) at a debt sale this week. Now it’s shooting for five times that amount next week.
With bond yields approaching levels that prompted bailouts of other euro nations, the government will offer 500 million euros of 18-month Treasury bills on April 17. The International Monetary Fund estimates Slovenia will need to borrow about 3 billion euros this year to repay maturing debt, aid banks and finance the budget.
Slovenia Bailout Would Be Spanish-Cypriot Mongrel
bloomberg.com/news/2013-04-1 … ngrel.html
The ink on the provisional bailout agreement for Cyprus was hardly dry last month before bond markets shifted their attention to Slovenia, another small euro- area country with a banking problem. The Slovenian government’s borrowing costs subsequently shot up.
The fear that Slovenia might be the next Cyprus, with international creditors again forcing losses onto bank bondholders and uninsured depositors, is only partly justified. Slovenia isn’t Cyprus, and its rescue program, when it comes, will probably look like a hybrid between the Spanish-style bailout and the Cyprus-style bail-in.
**European Commission is being pushed to take a tougher line with Slovenia **
ft.com/intl/cms/s/0/00108924 … z2SXix7Fnq
ECB interested in Slovenia seeking bailout: newspaper
in.reuters.com/article/2013/09/1 … 8220130911
The European Central Bank is interested in Slovenia applying for aid from the European Stability Mechanism (ESM), the euro zone’s bailout mechanism, German business daily Handelsblatt cited unnamed sources in Brussels as saying on Wednesday.
Slovenia has been in recession since last year and is struggling to avoid an economic bailout. On Friday Slovenian officials said they would liquidate two small banks to ensure the financial stability of its banking system.
The ECB declined to comment on the Handelsblatt report, which gave no further details on how any ECB interest in Slovenia applying for help had been expressed, or what it consisted of.
rte.ie/news/business/2013/12 … k-bailout/
Slovenian banks need €4.76bn recapitalisation
The country of just two million people seemed the model convert from Communism when it joined the euro zone in 2007 and promptly became the bloc’s fastest growing economy, exporting cars, kitchen appliances and pharmaceuticals.
But the global crisis dried up demand, drove up bad loans and exposed how far Slovenia had ducked the shock therapy much of eastern Europe went through with the end of the Cold War.
The state remains in control of around half the economy, through a complex web of ownership that often goes back to the biggest banks. Politically-motivated lending was rife.
“We supported companies at too high a price,” a senior Slovenian banker, who declined to be named, told Reuters.
Disentangling the banks could send shockwaves through the economy, which has already shrunk 11% since 2008.