Slovenia, hit hard by a boom-bust cycle and the euro area’s debt woes, faces a “severe” banking crisis if it doesn’t act quickly, the Organization of Economic Cooperation and Development said.
The Alpine nation should recapitalize “distressed, viable banks” while holders of subordinated debt and “lower-ranked hybrid capital instruments should absorb losses,” the Paris-based OECD said in a report today. State-owned banks such as Nova Ljubljanska Banka d.d. and Nova Kreditna Banka Maribor d.d. should be sold and non-viable banks should be wound down, it said.