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Central bank caution tempers Slovenian bank optimism

Slovenia’s central bank is restricting loans, uneasy about an overconfident relaxation of credit standards. But optimists argue that today the country’s banks are much better placed to weather another financial downturn. Kit Gillet reports.
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Six years after the banking crisis hit Slovenia, the country’s financial sector has returned to reasonable health, with important acquisitions taking place in 2019 that should further aid the sector. Still, with the domestic economy tied heavily to global developments, fears of a general worldwide slowdown are leading to renewed caution.

In mid-October, the Bank of Slovenia, the country’s central bank, said that unfavourable conditions in the international environment have started to “noticeably spill over to the Slovenian economy”, with growth of just 0.2% in the second quarter of 2019. Shortly after, the central bank said it would impose restrictions on consumer loans, in an attempt to curb “excessive” credit growth and protect borrowers from over-indebtedness.

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