T H E R O L E A N D T A S K S Banka Slovenije is the central bank of Slovenia. It was established by the Banka Slovenije Act adopted on 25 June 1991. Banka Slovenije issued payment notes into general circulation as a temporary currency on 8 October 1991, fol owed by the tolar, Slovenia’s first official currency, in September 1992. Since 1 May 2004, when Slovenia joined the EU, Banka Slovenije has been a member of the European System of Central Banks (ESCB). Slovenia joined the euro on 1 January 2007, and Banka Slovenije became part of the Eurosystem. Banka Slovenije is ful y independent in carrying out its duties, but at the same time as a public institution it is accountable to the general public and their elected representatives. Macroprudential policy Banka Slovenije‘s tasks Banka Slovenije identifies, Monetary policy monitors and assesses Banka Slovenije pursues the systemic risks to financial Eurosystem’s fundamental objective of stability, and puts in place the maintaining price stability. requisite measures to prevent and mitigate specific risks. Banka Slovenije fulfils its mandate We perform other tasks alongside independently and within the these fundamental functions. framework of the European System of Central Banks, based on four pil ars We are responsible for ensuring of activity. that payment systems and securities settlement systems function We implement the Eurosystem’s smoothly, and conduct inspections common monetary policy. We adopt of their security and efficiency. and implement measures that exert Bank resolution an influence on prices and the We do everything necessary to availability of money in the economy, ensure that Slovenia is effectively Banka Slovenije provides for thereby pursuing the chosen target supplied with fit and authentic the orderly resolution of banks of the monetary policy. Our basic banknotes and coins. We also in difficulties, minimising the objective is price stability, which exchange tolar banknotes and impact on the economy and on is also the primary objective of the damaged euro banknotes, and sell the public finances. European System of Central Banks, commemorative and special-issue of which Banka Slovenije is part. coins to col ectors and the general public. In our macroprudential policy we identify, monitor and assess systemic It is our responsibility to manage risks to financial stability, and put the central national database of the in place the requisite measures to debts of individuals deriving from prevent and mitigate systemic risks. credit operations (SISBON) and the debts of business entities (SISBIZ). We also supervise banks and savings banks for the purpose of promptly We also act as the payment and/or identifying risks in all areas of their fiscal agent of the state and as the operations, and taking effective representative of the state at interaction to ensure the stability of national monetary organisations, individual institutions, and the manage accounts for the state, banking system as a whole. government bodies and public-sector entities, attend to financial, Microprudential supervision We provide for the orderly resolu-monetary, banking and balance of tion of banks in serious difficulties, payments statistics, and manage the Banka Slovenije supervises banks and minimising the impact on the official foreign exchange reserves savings banks for the purpose of promptly economy and on depositors. and other Banka Slovenije assets. identifying risks. Monetary policy Monetary policy relates to central Why is price stability important? bank decisions that exert an influence on prices and the availA vital prerequisite for a healthy ability of money in the economy. economy is that prices neither These decisions play a part in raising rise significantly nor fall over the the standard of living, and ensuring longer term. Sharply rising prices solid economic growth and high (inflation) or fal ing prices (deflation) employment. cause uncertainty, and harm the economy. We speak of inflation when there is a general rise in prices How does the central bank maintain of products and services, and not price stability? just prices of individual items, over The Eurosystem’s target is to a certain time horizon. Deflation maintain inflation in the euro area is the opposite of inflation. Why is close to but below the 2% mark deflation undesirable? Because over the medium term. This is consumers put off purchases, on usual y done by setting the levels of the grounds that products will get interest rates on loans and deposits cheaper. Businesses thus sell less, offered to commercial banks. Their and economic activity slows. level affects the interest rates that commercial banks charge their What does price stability mean for clients for lending and saving. members of the public? When prices are relatively stable, What are interest rates? people can makes plans without The percentage of extra money worrying that their money will lose someone gets if they lend money to value. In this way they know for someone else (or keep it in the bank), example that in a year’s time they will or the percentage of extra money be able to buy a product for €100 for someone has to pay to borrow money which they are saving today. (on top of repaying the loan). Macroprudential policy Banka Slovenije has a legal obliga-economy. In practice this means that tion to ensure that the citizens of even if the system suffers a shock Slovenia have a stable financial (e.g. a financial crisis), we ensure system, and this is the principal that people are still able to access objective of macroprudential policy. their bank accounts, businesses can In contrast to microprudential make and receive payments, and supervision, in which we supervise investors can trade. individual institutions (banks), macroprudential supervision involves What are the risks? monitoring the functioning of the financial system and being alert to Systemic risks can arise in a variety potential risks. The right policies and of forms, and threaten the normal measures can mitigate these risks, functioning of the economy. One and prevent the build-up and trans-such risk is excessive indebtedness mission of risks across the entire on the part of businesses or house-financial system. holds. When a general slowdown in the economy comes, and unemployment rises as a consequence, the What exactly is the financial system? ability of debtors to repay their loans It consists of financial markets, diminishes. The banks who have financial institutions and infrastruc-financed this borrowing are left with ture, which are interconnected in non-performing loans, which debtors a complex network of business are unable to regularly repay, which relationships. The system mediates means that the banks would be between those who want to save, exposed to increased credit risk, and those who want to borrow which could harm their perfor-money. mance and endanger the normal supply of loans to healthy parts When is a financial system stable? of the economy. In this event we might decide on a macroprudential We speak of stability when the measure to limit the amount that can system is functioning smoothly, be borrowed by home buyers relative and can withstand potential shocks to the value of the real estate or their without major adverse effects on the income, to cap loan maturities, etc. Microprudential supervision Supervising the banking system Which banks do we supervise? is one of Banka Slovenije’s key functions. This ensures that banks Banks are classed as significant are on a solid footing, and are institutions and less significant reliably managing risk. institutions according to a number of criteria. Banka Slovenije is respon-Our microprudential supervision is sible for independently and directly conducted in the form of ongoing supervising Slovenia’s less significant supervision, i.e. monitoring and institutions, and regularly updates reviewing reports, data and informa-the ECB with regard to its findings. tion that the banks are required to submit periodical y, and in the form Since the creation of the Single of on-site inspections. Our objective Supervisory Mechanism in 2014, is identifying risks in all areas of the supervision of significant institutions operations of banks and savings has been conducted by the ECB via banks (credit risk, liquidity risk, its JSTs and in col aboration with operational risk, capital risk, interest Banka Slovenije. rate risk, reputation, AML), and taking effective action to ensure the How do we supervise banks? stability of the banking system and This we do through deep-dive the financial system. inspections of banks, and reviews of the risks that they take up. For example: (i) we conduct tests to examine the behaviour of banks in different circumstances, (i ) we ensure compliance with banking rules and regulations, and (i i) we conduct audits and inspections on site at banks and savings banks. We also ensure that banks are taking appropriate risk management measures. In this way we prevent banks from being run by unfit people, we approve or revoke authorisations to provide banking services, and we impose sanctions as necessary. Bank resolution Banka Slovenije is the national Deposit guarantee scheme bank resolution authority. Our basic mission in this context is ensuring an Banka Slovenije is the operator orderly resolution from the market of the deposit guarantee scheme, for banks in difficulties that can no whose fundamental objectives longer be rescued, and the continuity are to protect depositors and to of functions that are judged to be maintain their confidence in the critical to the economy. The bank’s banking system. The deposit resolution from the market and the guarantee scheme ensures access continuity of critical functions must to deposits in the event of a bank be ensured with the minimum of having no funds available. Banka disruption to the economy and the Slovenije guarantees the payment public finances. of deposits up to €100,000 or uses other measures to maintain depos-The aim in establishing a resolution itors’ access to deposits in the mechanism is for the burden and event of unavailability. The money cost of the resolution of an individual for the payments is provided from bank from the market to be borne the deposit guarantee fund, post not by the public finances, but by hoc emergency contributions by the banking sector. This reduces the banks, and short-term loans from the moral hazard, and simultaneously government. A sound and effective increases confidence in the banking deposit guarantee scheme is one of system on the part of depositors and the vital conditions for the mainte-the public at large. nance of financial stability in a country. To this end we independently draw up and update resolution plans for al banks under our direct jurisdic-tion, and participate in the resolution taskforces in creating and updating the plans of international banking groups with a presence in Slovenia. »There are two parts to my job. On the Governing Council of the ECB, I Governing Board of Banka Slovenije work with the governors of the other central banks to set our monetary policy. And within the Eurosystem we also work to ensure that the larger banks are functioning properly. In this way we ensure stable price growth across the euro area, which numbers approximately 340 mil ion people. These are also key decisions for Slovenia, where alongside monetary policy we also attend to the stability of the financial system. In this way Boštjan Vasle we make sure that businesses and Governor families are able to finance their everyday costs, and achieve their goals in business and in life.« Boštjan Vasle Governor Primož Dolenc Irena Vodopivec Jožef Bradeško Tina Žumer Jean Vice-Governor Vice-Governor Vice-Governor and Deputy- Vice-Governor Governor Banka Slovenije’ principal decision-The Governing Board decides upon making bodies are the Governor, and matters falling within Banka Sloveni-the Governing Board. je’s activities. The Governor is responsible for directing and organ-The Governing Board comprises five ising Banka Slovenije’s work. He/she members: the Governor, who chairs also sits on the Governing Council, the board, and four vice-governors. the ECB’s primary decision-making The members of the Governing body, which is responsible for taking Board are appointed by the National the strategic decisions that are key Assembly for a period of six years at to the functioning of the Eurosystem. the proposal of the president. We are Banka Slovenije 20 Headcount Qualifications Analysis and Research Internal Finance and Contro 1 lling 62 Risk Management 460 Banka Slovenije employs 460 Around 20% of the employees at The major activity that we carry out Banka Slovenije has total assets of We are responsible for the highest-people. Banka Slovenije hold a Level VIII is drawing up the national macro-more than €20 bil ion, and is thus the level risk management policy, which qualification (doctorate or master’s economic projections. These are largest institution in the country. Our covers financial and operational risks degree in science), while just over a complex combination of model department ensures that some of the alike. We also coordinate business Gender breakdown half hold a Level VII qualification. estimates that depend solely on central bank’s performance surplus continuity activities as part of our 53% women and 47% men The remainder (support staff) hold statistics. Drawing up the projections goes to fund the state budget; a total operational risk management. Level V and VI qualifications. is always a particular chal enge, as it of €162 mil ion has been transferred Age necessary to examine a wide range over the last six years. Resolution of data and to consider numerous The average age of employees at Subjects 44 possibilities for the evolution of Payment and Settlement Systems We manage the deposit guarantee Banka Slovenije is 44. Economics: 48% events. The core macroeconomic system, which guarantees deposits Business and administration: 12% projection is merely the scenario that Payment systems and securi-of up to €100,000 at any bank estab-Years of service Law: 6% is most likely at the given moment. ties settlement systems are an lished in Slovenia in the event of it Computer science: 5% important part of the economic and being unable to repay its deposits. The average total years of service of Mathematics: 3% Banka Slovenije employees is around Banking Operations financial infrastructure, and al ow for the transfer of cash and financial 19 years. As asset managers we play a major instruments between participants in Financial Stability and role in ensuring Banka Slovenije’s payment and settlement systems. Macroprudential Policy financial independence, as success-The total value of payments settled We help with economic research ful y managing almost €4 bil ion of in our payment system each year is at Banka Slovenije. This gives financial assets helps to cover the eight times larger than Slovenia’s researchers and analysts access cost of its operations. annual GDP. Central banks actively to a huge quantity of data, which men women monitor technological developments, is priceless for our understanding and even as we speak are actively of the background to economic mathematics considering the digital money of the processes. 4 computer science future. law business and economics administration 19 100.000 2.270 90% Systemic Supervision and Prudential Central Credit Register Cash Management Compliance Department Information Technology Governor’s Office Regulation The data exchange system on We ensure that the Slovenian market We work to ensure that Banka We are responsible for the informa-We provide support in carrying out We are the gatekeepers to the individual indebtedness (SISBON) is supplied with authentic and fit Slovenije and its staff act trans-tion system and the support that the mandate of the Governor of banking system: we issue authorisa-processes data about the debts cash, we exchange tolar banknotes parently and impartial y in carrying it provides for the bank’s business Banka Slovenije. This mainly entails tions to provide banking services, we held by individuals. Almost 90% of and damaged euro banknotes, and out their duties and pursuing the processes, which has proven to be coordinating his duties and appoint-licence members of bank manage-the people in Slovenia aged over 14 we sell commemorative coins to objectives imposed on them by very reliable during contingencies. ments, advising him on technical and ment boards and assess the fitness have entered into at least one credit col ectors and other members of regulations, while upholding the We are also aware that our own organisational matters, attending of members of bank supervisory operation, and these now have to be the public. At the Banka Slovenije framework of professional ethics and human resources are one of the main to protocol and correspondence, boards, we monitor developments reported to SISBON. counters we exchange an average integrity. Our duties include advising strengths in providing reliable IT and coordinating activities in the and we ensure that only fit and of 2,270 damaged euro banknotes on internal arrangements and support. organisation of major domestic and proper persons are able to become worth €147,300 each month. We processes, and on the drafting of international events. Financial Statistics bank owners. also still accept tolar banknotes and regulations affecting Banka Sloveni-General Services We col ect and process current data payment notes for conversion into je’s functioning, and checking that Public Relations and data series relating to Banka euros. staff conduct complies with the Code In the technical parts of the business Banking Supervision Slovenije’s activities. There are one of Ethics of Banka Slovenije. process we provide support for basic Through clear, content-fil ed and We conduct supervision of individual billion, three hundred million entries infrastructure functions, and play effective communications, we work banks through various mechanisms, in our tables (1,376,116,513 to be Legal Internal Audit a major role in business continuity to build a solid relationship with including inspections of banks’ precise), the same as the population Our tasks cover a very broad and security. We also ensure that internal and external audiences. business models, their internal of India. spectrum: on one hand we help As internal auditors we help to employees enjoy fit working condi-In this way we make sure that our governance and risk management, to draft bylaws and general acts, realise Banka Slovenije’s objectives tions, and work to improve energy message reaches the right audience and the risks relating to capital and while on the other we prepare by means of independent, impartial efficiency in our buildings. at the right time. Our transparent liquidity. The banking system is for lawsuits and depositions, and and objective recommendations communications help to raise Banka evolving all the time: there were 11 represent Banka Slovenije in court that aim to raise the performance of General Secretariat Slovenije’s profile, and to build its banks, three savings banks and two proceedings. individual organisational units and reputation in the domestic and branches of foreign banks operating improve risk management. Over 50 We support the functioning of the foreign environments. in Slovenia in 2021. recommendations are issued each decision-making bodies and other key year on average. working bodies at Banka Slovenije, 147.300 most notably the Governing Board, Organisation and Personnel the audit committee, the risk committee and the governor’s central We are responsible for carrying out advisory board. HR policy at Banka Slovenije. It is our job to see that employees upgrade the knowledge and skil s that they 50 need to do their jobs. 1.376.116.513 Additional activities of Banka Slovenije Education days Library Banka Slovenije’s cashier’s desk Banka Slovenije museum Mala galerija Banke Slovenije At Banka Slovenije we place great The Banka Slovenije library is home We opened the Banka Slovenije Banka Slovenije also aims to make emphasis on financial literacy, as in to around 16,000 bibliographic units, museum in 2021. The museum is a contribution to the quality of life the last few years there has been a primarily in the areas of banking designed for all generations to learn in Slovenia by engaging with the art resounding need for the public to and central banking, finance, about the work of Banka Slovenije world. Artists are given an exception-be offered a wide range of opportu-economics, legislation and informa-and its place in the Eurosystem. al opportunity to exhibit their work nities to learn about finance. Since tion technology. The library allows in our gal ery, which is located in the Some of the displays il ustrate how 2016 we have organised monthly very heart of the capital. Banka Slovenije conducts supervi-education days, with a primary focus sion, attends to stability and liaises on younger generations; approxi-with banks, while there is also a mately 900 primary and secondary historical overview of the workings school students have visited each of the central bank, and a review of year. Visitors to our education certain milestones in the use of cash. days learn about the functioning of Visitors can also browse audiovisual the central bank, and other more content, instructive games, interac-detailed subjects of their own tive material and traditional museum choosing, and can tour our museum, gal ery and cashier’s desk. Special Banka Slovenije’s cashier’s desk is displays to gain insight into how the workshops on cash are also held for located at Štefanova ulica 1. There central bank functions, and how this our youngest visitors. These activ-you can replace damaged euro affects the public and the country as ities aim to give the public a better banknotes and coins, and exchange a whole. insight into our activities, and an tolar banknotes. understanding of finance. You can also buy numismatic products. Namely, each year we internal and external users to borrow issue sets of Slovenian Euro coins, We have hosted a series of exhi-books for home, to borrow materials and commemorative and collector bitions in various fields of art via interlibrary loans, and to coins marking events and people of (architecture, painting, graphic search for materials across various national significance. design, sculpture, etc.), and in so databases. doing have supported young artists and contemporary art. History of the Banka Slovenije building Ljubljanska kreditna banka (LKB) After the liquidation of LKB in 1947, built its five-storey offices between its premises passed into the hands 1920 and 1923, on what is now the of the National Bank of Yugoslavia, corner of Slovenska and Cankarjeva. which gradual y began to expand Given LKB’s close links at that time into the as-yet unoccupied spaces, with Živnostenská banka in Prague, including the former premises of the bank building was designed by Emona, a coffee house, converting František Krásný, a Czech architect. them into more banking premises. The new building with 219 rooms After the establishment of Banka was built in modernist style, and Slovenije on 25 June 1991, the was one of the most advanced institution fully assumed the role buildings in the city at that time: it of the central bank of independent had central heating, hot water and its Slovenia. own generators, and also had cargo lifts and personal lifts (paternos-Banka Slovenije has worked with ters), and a ventilation system. The the City of Ljubljana and with the façade on what is now Slovenska Institute for the Protection of the was adorned with a large inscription Cultural Heritage of Slovenia to ful y saying Ljubljanska kreditna banka. renovate the interior and exterior of The display windows were protected the building. The Banka Slovenije against the sun by coloured awning. building is a cultural monument, and Trees were planted in beds on the is listed in the register of cultural balconies. The surroundings of the heritage real estate as the Slovenska building were also decorated with 35 building. trees. *The main entrance to the building It was the construction of the LKB is decorated with four Atlas figures, building that sparked the modernisa-who support the balcony on the first tion of Ljubljana city centre between floor. The Atlases were created by the wars. Together with neigh-Franc Berneker, a Slovenian sculptor. bouring financial institutions (banks, As repeating elements on the façade, savings banks and housing for they match the architectural style bank employees), the bank building well (this might be written below the formed the heart of Ljubljana’s picture of the building on the left) financial quarter. l Banka Slovenije Slovenska cesta 35 1505 Ljubljana, Slovenija www.bsi.si Issued by: Banka Slovenije Photos: Banka Slovenije archive Electronic edition Ljubljana, March 2022 https://www.bsi.si/en/about-us Kataložni zapis o publikaciji (CIP) pripravili v Narodni in univerzitetni knjižnici v Ljubljani COBISS.SI-ID 101067779 ISBN 978-961-6960-61-8 (PDF)