Slovenian central bank governor Marko Kranjec reiterated in an interview with the Bančni vestnik newsletter that Slovenia would have to recapitalise and sell its state-owned banks and companies. "I see no other option," he said, warning that the debtors are in the hands of irresponsible owners.
Governor: "In Slovenia, "we do not actually have real owners. The managers tried to take over companies through management buyouts and with bank loans, which has led to the milking of companies"
There are bright exemptions "but on the other side you have managers who pushed big companies to the brink of the abyss."
"Our big problem is that most companies are over-indebted." Banks often failed in terms of credit risk management, said the Banka Slovenije governor, whose term ends in July.
"Unfortunately, banks will have an aggregate loss in 2012. I expect it to be quite high because the cleaning of balance sheets is still under way," said Kranjec.
Touching on the government's plan to set up a bad bank, he
said it was hard to assess whether it will be cheaper this way or with recapitalisation of individual banks.
"Personally, I am most fond of a private solution to the bad claims problem. Although I am a state official, state solutions have never satisfied me," Kranjec told the newsletter.
"I agree that there will be no problems if banks get responsible owners. Results have shown that the state-owned banks are also the worst managed banks."
In Slovenia, "we do not actually have real owners. The managers tried to take over companies through management buyouts and with bank loans, which has led to the milking of companies."
Thus, Kranjec believes that banks in Slovenia are in a tougher position than elsewhere because instead of dealing with responsible owners, they have to deal with "speculators who wanted to become owners the easy way".
He said that the central bank, the banks' association, banks, the Finance Ministry and the Chamber of Industry and Commerce (GZS) are negotiating with more than 100 debtors. "Data shows that they should be kept alive."
The governor believes that the banks will have to reprogramme a part of loans to individual companies and that state guarantees will be needed for some loans.
"We are exceeding the mandate of Banka Slovenije, but this is our response to criticism by analysts that banks do not provide sufficient loans to promising companies."
Source: Sloveniatimes
