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Slovak banks need no state aid says Finance Ministry

Slovakia is a country whose banking sector is among the least affected by the current global financial crisis, the Slovak Finance Ministry and representatives of the Slovak Banking Association (SBA) concur, as reported by the TASR newswire.

Slovakia is a country whose banking sector is among the least affected by the current global financial crisis, the Slovak Finance Ministry and representatives of the Slovak Banking Association (SBA) concur, as reported by the TASR newswire.

The sector enjoys high profits and liquidity, stable interest rates from credits – including those on the interbank market – as well as the low exposure of Slovak banks to risk assets.

“The Slovak banking sector was highly profitable in 2008, with sufficient liquidity and without any need for special state aid programmes,” reads a draft of the Programme for Stability of Slovakia for 2008-12 that the ministry has drawn up and that is soon due to be submitted to the European Commission.

“The risk that Slovak banks face the most now concerns the ability of enterprises to settle their debts stemming from loans,” reads the document.

According to SBA executive director Ladislav Uncovsky, the legislation that the ministry is drafting – which attempts to mitigate the impact of the crisis on Slovakia's banking sector – is only preventive in nature. The measure follows up on the recommendation issued by the European Commission in October 2008.

According to the ministry, the initiative lays the groundwork for providing possible stabilisation aid to a bank afflicted by the global crisis. The assistance would feature the state depositing financial assets into a bank's basic capital, or it could be a state guarantee for bonds issued by the bank or a loan provided to the bank. TASR

Compiled by Zuzana Vilikovská from press reports
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