January 29, 2019 / 3:30 PM / a year ago

Court of Audit to examine Slovenian central bank

LJUBLJANA, Jan 29 (Reuters) - The Slovenian Court of Audit, which supervises state accounts and public spending, plans to audit the Bank of Slovenia for the first time, the court told Reuters on Tuesday.

It added no details on the planned audit can be revealed at present. However, sources told Reuters the audit is expected to include a costly Slovenian bank overhaul in 2013. The audit was enabled by Slovenia legislation changes in 2017.

“The audit will be demanding and may last several months,” the head of the court, Tomaz Vesel, told Reuters by phone.

“We will have to look at each document and together with the Bank of Slovenia determine whether it comes under our authority or under the authority of the European Central Bank.”

The Bank of Slovenia told Reuters it had received the court’s decree on the planned audit but declined any further comment.

The central bank came under fire by local analysts and media after the 2013 bank overhaul as many analysts claim the central bank forced the government to put too much money into banks and argue the banks’ shares and subordinated bonds should not have been scrapped in the process.

In 2013 the government had to pour more than 3 billion euros ($3.43 billion) into several local banks to prevent them from collapsing under a large amount of bad loans. In that way the country managed to narrowly avoid an international bailout.

About 600 million euros of subordinated bonds issued by six rescued banks were also scrapped in the process and many bond owners have turned to the courts, demanding their money back. So far no court case has been finalised.

Last week the European Commission said it will take Slovenia to court for having seized European Central Bank data during a 2016 police investigation at the Bank of Slovenia which was focused on the bank overhaul. ($1 = 0.8756 euros) (Reporting By Marja Novak, Editing by William Maclean)

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