Slovenia: Bank tests treated as military secret

Bank stress tests indicate that Slovenian lenders do not need a bailout, but private consultancies played a controversial role in the evaluation.

The test results, published last month and accompanied by positive statements from the Slovenian government, the Bank of Slovenia and the European Commission, say Slovenia can recapitalise its banking sector without international help.

But the role of financial consultancies, Oliver Wyman and Roland Berger, and auditors, Deloitte and Ernst & Young, in the exercise has prompted questions on lack of transparency and conflict of interest.

The EU commission and the European Central Bank (ECB) blessed the arrangements.

According to a press statement by the Slovenian central bank, the “scope, conditions and performers of asset quality review and stress-tests were determined by [an] intersector commission after consultation with [the] European Commission and European Central Bank.”

The stress test report on the central bank’s website notes that the tests were “closely monitored by the international organisations, constituted of the European Commission, the European Central Bank, and the European Banking Authority. These institutions ensured international standards were met and supported the design of the macroeconomic scenarios.”

The bank also says that due to lack of time, the ongoing credit crunch and prolonged negotiations with the EU institutions, it was forced to hire the “suggested” consultancies without a public tender and using a legal procedure normally reserved for arms procurement contracts.