LJUBLJANA, Jan 9 (Reuters) - The new governor of the Bank of Slovenia said the country’s banks are likely to face higher credit risks when an expected slowdown in economic growth occurs this year.
“In changed economic conditions when economic growth will slow down the conditions regarding possibility of credit repayment can change in the business and banking sectors so that banks will face somewhat higher credit risk,” Bostjan Vasle, who also sits on the European Central Bank’s Governing Council, told Radio Slovenia.
He was not available for comment.
Weakness in the local banking system almost pushed Slovenia into an international bailout in 2013. Since then the banks have returned to profit and managed to strongly reduce the amount of bad loans.
Vasle, 49, took over as governor of the central bank on Wednesday after parliament appointed him last month. He replaced Bostjan Jazbec who resigned in April to take on a position on the EU’s Single Resolution Board.
For the past 11 years Vasle was head of the government’s macroeconomic institute, which said in September Slovenia’s economic growth will slow to 3.7 percent in 2019 from 4.4 percent last year due lower growth of exports and investments amid a general slowdown in the European Union. (Reporting By Marja Novak; Editing by Toby Chopra)