BRUSSELS (MNI) – Slovenia can address its problems without having
to resort to a program of financial assistance, European Central Bank
Governing Council member Ewald Nowotny said Monday.
Speaking at a podium discussion, Nowotny, who heads the Austrian
National Bank, said he had discussed with colleagues from the Bank of
Slovenia the problems in that country, which is grappling with banking
sector troubles.
“Some banks really do have problems but I am sure it will be
manageable without a program,” Nowotny said.
He warned that talking about the possible need of a country to seek
help is dangerous, “because all this could lead to self-fulfilling
prophecies.”
In other comments, Nowotny said that the classical role of a
central bank as lender of last resort means providing liquidity, not
equity.
“Of course we know there are a number of instruments we might use,”
he said, “but for us it is a really basic element that we as a European
institution can work only in the context of the treaties. We are not
free to interpret this.”
–Frankfurt bureau tel: +49-69-720-142. Email: dbarwick@marketnews.com
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