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Restoring the financial sector and corporate deleveraging in Slovenia

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  • Urban Sila

    (OECD)

Abstract

Excessive credit growth, poor risk assessment and lax lending standards in the run up to the 2008 global crisis led to unsustainable debt build-up in banks and related corporates. A weak framework for the governance of largely state-owned banks is likely to have contributed to the misallocation of credit. Furthermore, there were weaknesses in the banks' risk management systems and banks often didn’t properly adhere to regulations and guidance given by the supervisor. Following the results of the stress tests and the Asset Quality Review, in December 2013, the major state-owned banks were recapitalised at a cost of around 11% of GDP, and part of their non-performing loans (NPLs) transferred to the Bank Asset Management Company (BAMC). Banks nevertheless remain weak, with still high NPLs, and corporations are highly leveraged. For successful restructuring and liquidation of assets, BAMC needs to act independently, transparently, with corporate governance of highest standards. Privatisation can improve corporate governance and closer supervision can ensure better compliance by banks. Insolvency legislation was thoroughly reformed in 2013 and should be implemented effectively to help return the healthy parts of the economy to invest and grow again. This Working Paper relates to the 2015 OECD Economic Survey of Slovenia (www.oecd.org/eco/surveys/economic-survey-slovenia.htm). Restaurer le secteur financier et le désendettement des entreprises en Slovénie Une croissance excessive du crédit, une mauvaise évaluation des risques et des normes de crédit laxistes pendant la crise mondiale de 2008 ont conduit à un endettement insoutenable dans les banques et les entreprises connexes. Une faible gouvernance des banques quasi-nationalisées a contribué à la mauvaise allocation du crédit. En outre, il y avait des faiblesses chez les banques dans les systèmes de gestion des risques, ils n'étaient pas souvent en conformité avec la réglementation et les directives données par le superviseur. Suite aux résultats des tests de résistance et l'examen de la qualité des actifs, en Décembre 2013, les grandes banques appartenant à l'État ont été recapitalisées à un coût d'environ 11% du PIB, et une partie de leurs prêts non performants (PNP) transférés à la Banque Asset Management Company (BAMC). Les banques restent néanmoins faibles, avec des créances improductives élevées, et les entreprises sont fortement endettées. À fin de réaliser une restructuration et une liquidation des actifs, BAMC doit agir de façon indépendante et transparente, avec une gouvernance des normes d'entreprise plus important. La privatisation peut améliorer la gouvernance d'entreprise et une surveillance plus étroite peut assurer un meilleur respect par les banques. La législation de l'insolvabilité a été réformée en profondeur en 2013 et devrait être mise en oeuvre pour aider à retrouver les parties saines de l'économie à investir et croître à nouveau. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de la Slovénie, 2015 (www.oecd.org/fr/eco/etudes/etude-economique-slovenie.htm).

Suggested Citation

  • Urban Sila, 2015. "Restoring the financial sector and corporate deleveraging in Slovenia," OECD Economics Department Working Papers 1243, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:1243-en
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    File URL: http://dx.doi.org/10.1787/5jrxml3x8vq0-en
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    More about this item

    Keywords

    banking system; deleveraging; désendettement; insolvabilité; insolvency; système bancaire;

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • G3 - Financial Economics - - Corporate Finance and Governance

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