Slovenian Finance Minister Sees Limited Trust In Banking System

Slovenia's banks are weak and trust in the system is limited, Finance Minister Uros Cufer told parliament on Friday, as expectations grew that the country may need financial help from abroad, Reuters reported. Slovenia's banks are crippled by at least 7.5 billion euros ($10 billion) of bad loans - more than a fifth of national output - with stress tests set to reveal in November how much help the sector will need. Although it makes up only a tiny proportion of the euro zone's economy, a bailout for Slovenia would fray nerves across the continent with a reminder that the region's debt crisis was not yet conquered. The head of euro zone's finance ministers, Jeroen Dijsselbloem, will visit the country on Sept. 30 for talks with top policymakers. Earlier this month the Slovenian central bank began the controlled liquidation of two small private banks in which the state guaranteed all deposits in order to prevent a bank run. "The decision for such a liquidation was right," said finance minister Cufer. "Any uncontrolled bankruptcy ... would be playing with matches," he added. "The banking system in Slovenia is relatively weak, trust in it is limited." Read more.