The Slovak Central Bank (NBS) is due to receive more extensive supervisory powers over financial institutes in Slovakia, as the amendment to the Bank Act will implement a number of EU directives to ensure greater supervision over banks.
The bill sponsored by the Finance Ministry along with NBS is scheduled to be discussed by the government on April 9. The new regulation framework will concern all banks in EU, the TASR newswire reported. “By introducing sterner requirements on banks and stock traders the risk of their failure can be minimised; which will contribute to greater stability of the financial system within the Slovak Republic as well as the EU,” reads the motion.
After the new legislation comes into effect, NBS will have new responsibilities. If, for instance, a Slovak bank were to experience troubles that could pose a risk for the entire banking sector, NBS would be obliged to immediately inform the European supervisory body about the situation. It would also be entitled to step up inspections, request the submission of special reports or scrutinise the bank’s plans.
Under the new law, co-operation with NBS when addressing a crisis situation will be mandatory for banks. Banks and branches of foreign banks will be required to maintain their liquidity and solvency permanently. “Banks and branches of foreign banks are required to inform NBS without delay about a failure or expected failure to meet their duties and, subsequently, submit to NBS a plan for a timely recovery of liquidity index compliance,” TASR the text.
Compiled by Zuzana Vilikovská from press reports
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9. Apr 2014 at 10:00