The global crisis shouldn't have an undue impact on the banking system in Slovakia, Prime Minister Robert Fico said following the special meeting of the Government (on Saturday, September 20).

However, the regulations of financial institutions in Slovakia will become more stringent, said Fico.

According to the premier, concerns have appeared that large European banks, which have privatised Slovak banks, may try to solve their financial problems by drawing money from their Slovak subsidiaries. "We want to give more power to the Slovak central bank (NBS) and other controlling authorities so that they can monitor the situation and prevent the system from possible financial operations aimed at drawing assets from Slovakia in order to solve some problems abroad. I believe that this measure will support our possibilities of controlling the behaviour of privatised Slovak banks," said Fico.

According to Slovakia's Finance Minister Jan Pociatek, the financial sector in Slovakia is oriented mainly on the domestic economy and has a relatively small investment share in the risky mortgage markets. "Losses on these markets don't threaten directly the management and solvency of institutions on our financial market. The risk that the global financial crisis will have impact on our financial institutions is relatively small," emphasised Pociatek.

All Slovak banks are currently owned by foreign entities, therefore, their further development is also important for our sector, says Pociatek. "All these banks are situated in Europe. They are rather conservative, and according to our information, they shouldn't be significantly influenced by the products connected to mortgages," he claims, adding that the liquidity of Slovak banks is adequate.

NBS also supports the discussion about toughening the regulation rules on the Slovak financial market. According to NBS governor Ivan Sramko, the problems that emerged in the global economy last week show that the risks on the capital markets have reached a new dimension. "We will together try to improve the regulation mechanisms, so that they provide more safety for the clients," emphasised Sramko.

(TASR; illustration photo: Slovak Prime Minister Robert Fico)