Banka Slovenije’s commentary on Court of Audit report released today

The Court of Audit of the Republic of Slovenia has today released its report on the performance of Banka Slovenije’s supervisory function, which relates to the period of the bank recovery and resolution in 2013 and 2014. Banka Slovenije’s view is that the report exceeds the powers of the Court of Audit, and encroaches on Banka Slovenije’s independence. We therefore filed a request some time ago for the assessment of the constitutionality of the provisions of law that grant the Court of Audit the power to oversee the supervisory practices of Banka Slovenije. We will thus refrain from commenting in detail on the report released today by the Court of Audit until the Constitutional Court has given its decision.

The Court of Audit has been conducting an audit over the last two years at Banka Slovenije in connection with the implementation of its supervisory function. Banka Slovenije warned a while ago that it is being conducted in a way that encroaches on the independence of Banka Slovenije, which it also communicated to the Court of Audit. The report released today has confirmed that our warnings were right.

A decision was made at Banka Slovenije in October to submit a petition for the review of constitutionality 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 European Union. The Constitutional Court has not yet pronounced its decision, and we will therefore refrain from commenting in detail on the report released today by the Court of Audit.

Amid numerous unresolved issues, judicial relief has still not been granted to participants

All previous attempts to find solutions to unresolved issues were unsuccessful, for which reason appropriate judicial relief has still not been granted to all participants in the recovery processes. Banka Slovenije’s view is that only judicial relief is capable of ensuring the adequate resolution of these unresolved issues.

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. The same is true of the report released today by the Court of Audit, which in our opinion has been produced in a way that fails to comply with Slovenia’s constitutional arrangements. All of this has been a burden on the functioning of Banka Slovenije, and has tarnished Slovenia’s reputation in the eyes of the international community, while hindering the course of judicial proceedings at the same time.

At Banka Slovenije we are aware of the importance of comprehensively settling the unresolved issues in line with the Slovenian legal system and EU law at the earliest possible opportunity. We have therefore decided that Banka Slovenije will take a more active role in the search for solutions to unresolved issues. At our initiative, an independent team of legal experts has already begun working together with the aim of formulating proposals for the comprehensive settlement of unresolved issues. The team includes Prof Miha Juhart, professor of civil and commercial law at the University of Ljubljana’s Faculty of Law, Miro Prek, a former judge at the General Court of the European Union and a specialist in EU banking law, Prof 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.