This report on the Financial System Stability Assessment presents the main findings and overall assessment of the Republic of Slovenia's financial system. The paper analyzes the reports on the Observance of Standards and Codes on banking supervision, securities regulation, insurance supervision, and payment systems. The assessment confirms the strong supervisory standards attained in Slovenia, and noted the current absence of consolidated supervision and the regulatory gap governing investment guidelines for insurance companies, and the need for a strong financial system.
International Monetary Fund. European Dept. and International Monetary Fund. Monetary and Capital Markets Department
The Slovenian financial system has been hard hit by the crisis. Banks remained highly vulnerable to continued credit deterioration and refinancing risks. Strengthening of financial condition of banks should be the short-term priority. The financial restructuring should be followed by privatization of state-controlled banks. The supervision of financial institutions should be complemented with a macroprudential overview geared toward overall stability of the financial system. The crisis preparedness and management framework should be improved, and risks to systemic financial stability should be identified.
Ms. Victoria Gunnarsson, Sergio Lugaresi, and Marijn Verhoeven
The paper assesses the financial situation of the health sector in the Slovak Republic. It also evaluates the efficiency of health expenditures and service delivery in comparison to the OECD and other new EU member states and suggests avenues for cost recovery and reform. The health sector of the Slovak Republic is plagued by financial problems. To turn around health system finances and achieve larger gains in health outcomes, the efficiency of health spending needs to increase and the mix and quality of real health resources need to be improved. Although Slovak's overall health spending efficiency is on par with that of the OECD, substantial inefficiencies occur in the process of transforming intermediate health inputs into health outcomes. Efficiency may be enhanced by containing the cost of drugs and reducing reliance on hospital care. Also, although cost-effectiveness may be relatively high at present, its sustainability in the future is an issue.
This 2005 Article IV Consultation highlights that Slovenia’s real GDP growth accelerated to 4½ percent in 2004 driven by a large positive swing in the contribution of net foreign demand, while domestic demand growth maintained momentum. Private consumption strengthened, though to a lesser extent than expected owing to an apparent increase in the propensity to save. Economic growth is expected to moderate to 4 percent in 2005, but would still be above estimates of potential. Domestic demand is expected to ease, owing to a further slowdown of inventory accumulation.