Statement by First Deputy Managing Director David Lipton on Slovenia
IMF News, October 9, 2016
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- Published: October 9, 2016
Context and metadata
- Press Release No. 16/454
- Date: October 9, 2016
- Speaker: Mr. David Lipton, First Deputy Managing Director of the International Monetary Fund (IMF)
- Meeting: Met with Bank of Slovenia Governor Bostjan Jazbec on the sidelines of the IMF-World Bank Annual Meetings in Washington, DC.
IMF assessment of Slovenia’s economy
- “Our current assessment is that, while growth has returned, Slovenia could grow faster and more sustainably with further reforms.”
- Swift policy actions, including in the financial sector, are needed to:
- stimulate private investment
- reduce vulnerabilities
Financial sector actions and historical recapitalization
- Commendation: Bank of Slovenia and the Ministry of Finance led the 2013 bank diagnostic exercise and subsequent recapitalization.
- These steps “played a critical role in bringing the country back from the brink of a crisis.”
- The recapitalization and diagnostic work “restored confidence in the financial system and set the conditions for a sustained economic recovery.”
- Policy recommendation:
- Continue efforts that supported the 2013 recovery
Privatization of recapitalized banks
- Recommendation:
- Privatization of the recapitalized banks will:
- foster their development
- allow partial recouping of the public funds
Non Performing Loans (NPLs) and SMEs
- Urgent policy priority:
- “It is also time to decisively deal with bank Non Performing Loans (NPLs), especially to small and medium enterprises (SMEs).”
- Specific recommendation:
- Implement swiftly the guidelines for resolution of NPLs to SMEs prepared by:
- the Bank of Slovenia
- the Bank Association
- Expected effects of swift implementation:
- facilitate resumption of bank lending
- contribute to raising investment
- support economic growth
- increase employment
Central bank independence
- Discussion point:
- Principles of central bank independence and non-interference with the central bank’s execution of its duties
- IMF stance:
- The IMF “strongly supports” central bank independence
- Respect for these principles is “important to ensure continued confidence in the economy”
Statement by First Deputy Managing Director David Lipton on Slovenia, Press Release No. 16/454, October 9, 2016.