Banka Slovenije response to call by Ministry of Labour, Family, Social Affairs and Equal Opportunities

01/26/2023 / Press release

Since the introduction of the macroprudential measure in November 2019, Banka Slovenije has continually monitored the key parameters affecting its performance. The macroprudential measure is adjusted and augmented by other measures as necessary.

We last adjusted the measure in May of last year, when we modified the conditions for approving exemptions, with two key focuses:

- Since July of last year it has been possible to lend to customers whose remaining income after payment of the monthly instalment is less than the prescribed figure. Banks may apply this exemption to no more than 10% of loans. According to data from banks, only 2.4% of housing loans have recently been approved under this exemption (less than the 10% allowed).
- Loan agreements for residential real estate fully backed by government guarantee are exempted from the restrictions on household lending.

At the prompting of the Ministry of Labour, Family, Social Affairs and Equal Opportunities, the latest rise in the minimum wage in January was enacted in the Enforcement and Security Act adopted by the National Assembly. This also raised the amount that in accordance with Banka Slovenije’s existing conditions for household lending must remain in the borrower’s account after repayment of the monthly annuity. The existing macroeconomic measure therefore protects borrowers from taking on monthly debt servicing costs that would leave them short of the minimum amount needed to cover living expenses prescribed by law. Here we should add that when viewed over the longer term, the general level of wages is rising alongside the minimum wage, which is increasing the creditworthiness of other borrowers. According to the latest figures, growth in housing lending is relatively high, with a year-on-year rate of 10.5%.

In keeping with established practice, Banka Slovenije will therefore strengthen dialogue with the relevant institutions to find a solution that suits borrowers raising loans and those who are unable to repay loans.