Bank Repairs are Overpaid Says the Former Prime Minister

By , 18 Nov 2017, 13:09 PM Politics
Borut Pahor Borut Pahor Wikimedia commons

 

What are the main issues of the biggest state-owned bank? 

 

The National Assembly investigative commission investigated the former Prime Minister Anton Rop who served as Prime Minister from the end of December 2002 to December 2004 and the President Borut Pahor. Anton Rop expressed his surprise for receiving invitation to be investigated before the commission, as he was no longer politically active in the period of the the banking hole and its rehabilitation. According to Rop, the funds invested in the rehabilitation of banks at the end of 2013 were excessive, and the process was erased, due to pressure by European Commission and the Bank of Slovenia. Regarding the banking hole, Rop assessed that, this was due to the global financial crisis that crossed the financial flows among banks adding also that some issues were also due to poor and irresponsible behavior.

A dialogue with the EU

According to Rop's assessment, at least € 1.5 billion were invested in the rehabilitation of banks at the end of 2013, and the assumptions for the assessment of load tests were exaggerated. Moreover, he added that certain things can be arranged and that they do not have to be automatically removed. He emphasised that Slovenia needs to learn certain realistic policies, as far as the European Union is concerned and needs  a dialogue with the EU.

The possible reasons for the banking hole

Borut Pahor, who was holding the position of Prime Minister from late November 2008 to February 2012, also testified before the Bank Investigation Commission. According to him, the banking hole began with bad credit practices in banks, long before his government. Given the generally good economic mood in the world, banks from 2005 to 2007 often gave a lot of loans in an uncritical manner, which had due dates in the years of the crisis. He explains that at that time, there had been a 'conflict of criticism', since previously banks had been accused of giving too much credit, so in times of crisis, they had not given any thus puting themselves in a very difficult situation. He aslo adds that today we have no evidence that it would have been better if the government acted earlier and also the expert public had not yet said the final decisions on recipes for exit from similar crises. He emphasized that when the world crisis arose, the government brought decisions the way they knew best and they thought right.

On the Iranian money laundering scandal in NLB

The scandal centres around Iranian and British citizen Iraj Farrokhzadeh, who opened accounts at the bank in December 2008 for the company Farrokh Ltd., after authorities in Switzerland shut down his accounts at UBS. The claim is that  Farrokhzadeh may have laundered nearly 1 million euros from Iran between 2008 and 2010 through the country’s biggest state-owned bank, Nova Ljubljanska Banka (NLB).

The President explained that the issue on money laundering scandal in the NLB was not specifically addressed by his cabinet since he was advised that the case was being investigated by the Office for Money Laundering Prevention. For two years in his mandate he didn’t know anything about this and asked the commission to investigate why this happened, notes daily newspaper Dnevnik.

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