Statement of the Governor Banka Slovenije’s next steps in the search for solutions to unresolved issues following the bank recovery and resolution in 2013
Since the recovery and resolution of the banking system in 2013, Slovenia has seen a debate on the decisions made at that time by Banka Slovenije, and on the consequences for those involved in that process. Due to unsuccessful attempts to find solutions to unresolved issues, it is still not possible to provide the appropriate judicial relief to all participants in that process. Moreover, previous solutions frequently raised legal questions, and led to a review of their constitutionality and the filing of a lawsuit against the Republic of Slovenia before the Court of Justice of the EU. All of this has been a burden on the functioning of Banka Slovenije and tarnished Slovenia’s reputation in the eyes of the international community.
I have therefore decided that Banka Slovenije will take a more active role in the search for solutions to unresolved issues. At my initiative, an independent team of legal experts will begin working together with the aim of formulating proposals for the comprehensive settlement of unresolved issues.
Since 2014, Banka Slovenije’s competences in the recovery and resolution of banks, the correctness of its decisions and the absence of the possibility of providing the participants in that process judicial relief have all been questioned. Later attempts to shed further light on the course of the process raised additional questions in connection with Banka Slovenije’s position in the national legal system, particularly in connection with its status as a member of the European System of Central Banks and its status of independence.
Despite extensive debate and attempts to settle at least some of these issues, insufficient progress has been made in the resolution of unresolved issues in the six years since the recovery and resolution of the banking system: judicial relief for the former holders of subordinated debt has still not been properly arranged, while the Constitutional Court of the Republic of Slovenia last year declared the law meant to govern this area potentially unconstitutional. In connection with the police investigation at Banka Slovenije, the European Commission has initiated proceedings before the Court of Justice of the EU due to the breach of EU law on account of the seizure of ECB documents. The question of the constitutionality of the provisions of the Banka Slovenije Act that task the Court of Audit of the Republic of Slovenia with reviewing the bank recovery and resolution process was stayed by the Constitutional Court some time ago with the aim of determining whether the aforementioned act is constitutional. Such conditions significantly hinder Banka Slovenije’s work by placing an undue burden on its operations and making it more difficult to carry out its tasks. They also have a negative effect on Slovenia’s reputation.
Establishment of a taskforce to formulate proposed solutions for unresolved issues
As I emphasised at the very beginning of my term of office, I am striving to address the aforementioned issues as quickly and as comprehensively as possible, I am committed to finding a solution that will be acceptable in legal terms and in terms of the functioning of Banka Slovenije and the entire Eurosystem. I am also aware that such a solution must be acceptable in the wider social context.
I have therefore decided to actively involve Banka Slovenije in the search for a solution. I am aware that as a party to the proceedings we cannot be entirely impartial in resolving this issue, and so I am setting up a taskforce of independent, reputable experts, who, on the basis of their in-depth understanding not only of the situation in narrow technical terms, but also from the perspective of the functioning of society as a whole, will draw up a set of proposals for the comprehensive settlement of the aforementioned unresolved issues. I believe that the proposals formulated by a taskforce set up in this manner will help in raising the expertise of the debate, and in taking a constructive approach to resolving the unresolved issues.
Expressing their readiness to participate in the aforementioned taskforce were Professor Miha Juhart, a full professor in the area of civil and commercial law at the Faculty of Law at the University of Ljubljana, Miro Prek, a former judge at the General Court of the European Union, specialising in EU banking law, Professor André Prüm, professor of financial and economic law at the University of Luxembourg and a member of the European Banking Authority (EBA), and Franc Testen, former President of the Constitutional Court and Supreme Court of the Republic of Slovenia. Representatives of Banka Slovenije and the Ministry of Finance will also be involved, and will have a support role in providing the requisite information and data.
Request for the assessment of the constitutionality of the Banka Slovenije Act
A review by the Court of Audit of the Republic of Slovenia regarding the implementation of its supervisory function has been in progress at Banka Slovenije for the last two years. In the final phase of that process, Banka Slovenije finds that it is being carried out in such a way that it affects the independence of Banka Slovenije.
I have therefore decided to once again protect the independent position guaranteed to Banka Slovenije by the Constitution of the Republic of Slovenia and the Treaty on the Functioning of the EU. Banka Slovenije has therefore filed a request for the assessment of the constitutionality of the provisions of the Banka Slovenije Act in the part that gives the Court of Auditors of the Republic of Slovenia the power to oversee the supervisory practices of Banka Slovenije. That request includes a proposal for staying the implementation of those provisions.