SLOVAKIA’S central bank is likely to receive more supervisory powers over other financial institutions in Slovakia. This will be possible due to the amendment to the Bank Act passed by the government on April 9, through which it will implement a number of European Union directives designed to ensure greater supervision over banks by supervisory bodies, the TASR newswire reported.
The new regulatory framework will concern all banks in the EU.
“By introducing sterner requirements on banks and stock traders, the risk of their failure can be minimised, which will contribute toward greater stability of the financial system within Slovakia as well as the EU,” reads the motion, as cited by TASR.
After the new legislation comes into effect, the National Bank of Slovakia (NBS) will be required to inform the European supervisory body when a Slovak bank experiences problems that could put the entire banking sector at risk. Moreover, it would be entitled to step up inspections, request the submission of special reports and scrutinise the bank’s plans.
The banks will also be obliged to cooperate with the NBS when addressing a crisis situation. Moreover, banks and branches of foreign banks will be required to maintain their liquidity and solvency permanently. They will also have to inform the NBS about a failure or expected failure to meet their obligations without delay and, subsequently, submit to the NBS a plan for a timely recovery of liquidity index compliance, as reported by TASR.
14. Apr 2014 at 0:00 | Compiled by Spectator staff