Slovenia’s bank stress tests – in the clear? | beyondbrics

Slovenia’s bank stress tests – in the clear? | beyondbrics:

"

Slovenia is no longer the Switzerland of Eastern Europe – but perhaps not the Cyprus or Ireland, either.

Slovenia’s government is confident that it can now dodge the bullet of an international bailout, announcing on Thursday that it would be able to cover a whopping €3bn recapitalisation of its troubled banks from its own resources, despite that sum totalling nearly 10 per cent of GDP. While the announcement has been made with a palpable sense of relief in the tiny eurozone country, questions remain about implementation – and whether the absence of international pressure will allow Slovenia to stall on much-needed reforms.

The bailout package comes after stress tests by independent consultants, and will involve €2.1bn in government cash, €905m in bonds, and €1.1bn raised by five smaller banks in the country. Junior bondholders in the three biggest state-owned banks will take a €441m haircut."

'via Blog this'