Regulation of judicial relief for holders of subordinated debt

Following the National Assembly’s latest voting on the Act on Judicial Relief Granted to Holders of Qualified Bank Credit, it is with regret that the Bank of Slovenia notes that its fundamental positions and the similar views of other institutions were not taken into consideration.

As adopted, the law contravenes current legislation in Slovenia and international law governing the functioning of the central bank. The law is disputable primarily on the grounds of the prohibition of monetary financing, and financial independence. These are fundamental principles in the functioning of central banks in the euro area.  The law puts the Bank of Slovenia in a substantially weaker position, which is unprecedented in Slovenia and the EU: making a public institution so strictly liable for its functioning is unique. The law stipulates that the Bank of Slovenia’s liability is potentially objective, while it is subject to a reversed burden of proof. The Bank of Slovenia is required to pay individuals a flat compensation amount, irrespective of liability.   

For more information, see the press release.