Messages related with coronavirus
At the Bank of Slovenia we have been closely monitoring and analysing the ongoing coronavirus situation ever since the outbreak of the novel virus. We have always said that the situation needs to be taken extremely seriously, and for this reason we began drawing up a number of different scenarios weeks ago. We can provide reassurance that all key processes are working as intended. In the preparation of measures, we are working with the government and with the commercial banks and other institutions.
Banks will be able to temporarily exclude declines in income caused by epidemic when calculating creditworthiness
22 May 2020
Banks will be allowed to exclude months that see a temporary decline in income as a result of the Covid-19 epidemic from their calculations of consumer creditworthiness. In dealing with the extraordinary situation of the struggle against the Covid-19 epidemic, Banka Slovenije has made adjustments to its current rules stipulating that income over the preceding year is taken into account in the calculation of a consumer’s annual income before a new loan agreement is signed. The changes enter into force on 1 June 2020.
Restrictions on profit distribution at leasing companies
20 May 2020
Having recently adopted a macroprudential measure restricting profit distributions by banks and savings banks, Banka Slovenije has issued a recommendation extending similar guidance to leasing companies. The epidemic crisis, which has hit Slovenia too, will have major economic consequences, which are certain to also have an impact on leasing companies. The purpose of the recommendation is ensuring that leasing companies retain the highest possible level of capitalisation. It is expected to be in place for one year.
The banking system came into the crisis in good shape; the deterioration during the crisis will depend on its duration and depth
19 May 2020
Banka Slovenije’s assessment is that the banking system was in good shape as it entered the crisis caused by coronavirus. Given the sheer magnitude of the shock and the huge decline in economic activity, the banking system’s liquidity position will deteriorate over time, while the downward pressure on capital adequacy will increase. Banka Slovenije drew up two scenarios to assess the banking system’s readiness for the crisis: under the assumption of a decline of around 6% in economic activity, the banking system could approach zero profitability. In the event of a deep recession, the banking system’s capacity to absorb the adverse effects through surplus capital would be strongly diminished.
March sees large decline in services trade, as travel segment contracts by more than half
14 May 2020
The initial indicators confirm that the economy took a sharp downturn going into the second quarter. Banka Slovenije can report that international trade fell significantly in March, largely as a result of the measures to curb the coronavirus pandemic introduced at home and abroad in that month. With merchandise imports declining by even more than merchandise exports, the merchandise trade surplus strengthened again. The measures hit trade in services particularly hard, most notably imports and exports of travel services.
22,230 applications for borrowers’ moratorium in first month
11 May 2020
Banka Slovenije can report that during the first month that the new law was in force (to the beginning of May), banks received 22,230 applications from borrowers for a moratorium on repayments, equivalent to 3.3% of total loans. Our assessment is that future developments in the number of applications will depend primarily on the possibilities for reigniting the economy afforded by the coronavirus situation.
Governor’s statement following the ECB’s monetary policy meeting
1 May 2020
Amid the ongoing coronavirus pandemic, and the measures taken by governments to curb its spread, the euro area economy has taken a sharp downturn. Given the fall in GDP even in the first quarter, and the further deterioration expected, the euro area will end the year with a large decline in GDP. In this situation the central bank governors judged that there is a need for additional monetary policy stimulus, and highlighted the urgent need for more-ambitious, better-coordinated fiscal policy measures at the European level.
Restrictions on profit distribution at banks and savings banks
8 April 2020
The Bank of Slovenia has adopted a macroprudential measure placing temporary restrictions on banks and savings banks in their profit distribution. The purpose of the measure is to retain capital so that the banking system is better able to withstand potential losses, and to continue supplying credit to businesses and households. The measure is expected to be in place for one year, although the Bank of Slovenia will closely monitor the situation, and will modify the measure as appropriate should the risks increase or decrease significantly.
FAQs in connection with the Emergency Deferral of Borrowers’ Liabilities Act (ZIUOPOK)
7 April 2020
The Emergency Deferral of Borrowers’ Liabilities Act (ZIUOPOK) was adopted at the proposal of the government. Its exact manner of implementation is a business decision for the commercial banks. To help borrowers, the Bank of Slovenia has drawn up answers to a number of frequently asked questions, in conjunction with the Ministry of Finance, which drafted the new law. For any more detailed questions, please contact the ministry.
Implementation of the PEPP
1 April 2020
On 18 March 2020 the Governing Council of the ECB instituted the Pandemic Emergency Purchase Programme (PEPP), a new, temporary programme with an overall envelope of EUR 750 billion, equivalent to 6% of euro area GDP. Purchases under the new programme began on 26 March 2020, and will be conducted until the end of this year.
Slovenian economy to pay a high price in the fight against coronavirus
31 March 2020
The Bank of Slovenia’s assessment is that the price to the Slovenian economy exacted by the outbreak of the coronavirus pandemic is very likely to exceed that of the last global financial crisis. In analysis entitled Impact of coronavirus on the Slovenian economy, we outlined three potential scenarios of future developments, and calculated their potential impact on the economy.
Publication Assessing the impact of the COVID-19 outbreak on the Slovenian economic outlook
ECB recommendation to banks to refrain from dividend payments until October at least
30 March 2020
Last Friday ECB adopted a recommendation whereby, in light of the coronavirus crisis, banks should wait at least until October 2020 before paying dividends or undertaking share buy-backs.
The Bank of Slovenia has extended all of the ECB measures to less significant banks and savings banks
24 March 2020
The Governing Council of the ECB, among them Boštjan Vasle, Governor of the Bank of Slovenia, have over recent days reaffirmed their commitment to doing everything possible to help citizens face the current uncertain situation. Additional measures were taken to support families, businesses and governments.
Clarification for borrowers following the adoption of the Emergency Deferral of Borrowers’ Liabilities Act
23 March 2020
The law provides for the deferral of credit liabilities for firms, sole traders, cooperatives, farmers and also other individuals. Loan restructuring, which to date has been an option available by agreement between banks and borrower, is thus made mandatory by the law.
Governor’s statement following last night’s meeting of the Governing Council of the ECB
19 March 2020
Recent days have seen the economic slowdown caused by the spread of coronavirus joined by profound uncertainty on the financial markets. The governments of individual countries and, in particular, collective international institutions have therefore been taking intensive action to deal with the uncertain situation. At last night’s meeting of the Governing Council of the ECB, we approved an additional package of measures to help households, businesses and governments.
No disruption to key processes; the Bank of Slovenia is also helping to draw up measures for bridging liquidity difficulties
18 March 2020
The Bank of Slovenia has long felt that the coronavirus situation needs to be taken extremely seriously. Because our responsibilities include processes that are vital to the smooth functioning of the government and the whole country, we began working on various scenarios several weeks ago. We can therefore provide assurance that all key processes are working as intended, and will continue to do so even if the situation worsens.
Banks and savings banks change their working hours
16 March 2020
The Bank of Slovenia supports them in their preventive measures to protect their staff and their customers.
Governor’s statement following the ECB’s monetary policy meeting
13 March 2020
The previously known risks to economic growth in Slovenia and the entire euro area have been joined this year by the escalating uncertainty surrounding coronavirus. The Bank of Slovenia’s assessment is that the impact will be largest in manufacturing and in services, most notably transport and tourism.