30 years of ensuring monetary stability
The establishment of the Slovenian central bank as an independent monetary institution was adopted together with other constitutive documents in the historic parliamentary session of 25 June 1991. For this reason, together with Slovenia itself, this year sees Banka Slovenije celebrate its 30th anniversary. In this period of time, we have materially contributed to the development of the country and have been a part of numerous significant milestones for Slovenia.
“The Banka Slovenije Act serves to put in place the foundations of the monetary system and central bank operations in the republic, whereby the decision to adopt our own monetary system and to establish an independent central bank is being fulfilled.” With these words, in the historic session of 25 June 1991, then Prime Minister Lojze Peterle explained the significance of establishing the Slovenian central bank. By establishing its own central bank, Slovenia took hold of the key levers for conducting monetary policy: providing Slovenia’s own currency, stable price levels and ensuring stability in the banking system.
The economic situation at that time was marked by some special circumstances. There was high inflation and cash and foreign currency restrictions, and the separation from the National Bank of Yugoslavia was in the process of being settled. In such circumstances, preparations for the issuing of temporary cash in the form of payment notes had begun well in advance. Paper left over from the stock used for admission tickets to the Sarajevo Olympics was used to print the notes. That is why the payment notes had the water mark of a snowflake. Slovenians could exchange Yugoslav dinars for the payment notes starting on 9 October, which was the day after the agreed three-month moratorium on implementing the adopted independence laws expired. The day before that, Banka Slovenije had ensured the supply of the necessary quantities of banknotes to financial institutions.
In addition to supplying cash, Banka Slovenije had to set up an entirely new organisation of central bank operations in the new independent state. Our vital task was not just to ensure an appropriate quantity of banknotes in the new currency, but also to ensure that the currency would be strong and stable, and accepted abroad. One of the more important decisions therefore was regarding the exchange rate, which was set at SIT 32 to 1 Deutschmark. At the same time, there was a need to establish a new system for supervising banks, while one unique task was to alter the mode of work in many areas due to the transition to a market economy.
The tasks that Banka Slovenije carried out successfully at that time, along with many others that followed, have made it possible for us to join together with other central banks in conducting the monetary policy of the Eurosystem. This allows us to provide stable growth of prices throughout the euro area, which provides a supportive environment for the achieving of the life and business objectives of approximately 340 million inhabitants. We participate in the maintenance of the regulatory framework within which financial institutions operate, and together with the other central banks in the Eurosystem we also conduct supervision of the operations of banks and savings banks.
In recent years, our mandate has been additionally expanded. In this way, our responsibility also covers ensuring the stability of the financial system: through macroprudential policy we address the risks that could impair its intermediary function. Through this, we contribute to a stable economic environment, and enable citizens and companies to pursue their life and business objectives.