ECB policy

Banking by the Book

Srdjan Zivulovic_reuters
Do I look worried?
  • Why it matters

    Why it matters

    Mr. Jazbec defends ECB policies, including the ELA program for troubled banks and quantitative easing.

  • Facts


    • The ECB has approved Emergency Liquid Ássistance loans for Greek banks.
    • Two Slovenian banks also received ELA loans in 2013 and 2014.
    • Mr. Jazbec believes that the ECB’s monetary policy needs to be supplemented with structural reforms.
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As an International Monetary Fund expert, Boštjan Jazbec helped to set up Kosovo’s central bank and gained experience with emergency lending and crisis management. In 2013, he became president of Slovenia’s central bank at the age of 43, some 30 years younger than his predecessor, Marko Kranjec. He inherited a banking sector on its knees, with two Slovenian banks requesting emergency lending in 2013 and 2014.

Slovenia became a member of the euro zone in 2007. Despite difficulties with the currency, Mr. Jazbec believes other European countries should join the monetary union. In Slovenia, it has promoted prosperity, he says.

Handelsblatt: The European Central Bank recently suspended special rules for Greek government bonds. Now they can no longer be deposited as collateral for bank loans. Why?

Mr. Jazbec: The rules are clear: The ECB can only accept Greek government bonds as collateral if the aid program is continued. The new government has sent a very ambivalent message in this regard. That’s why we had to act.

The ECB has exercised enormous political power with its decision. But you and the other members of the Governing Council are not democratically elected. Do you approve of that?

Central banks are independent. That’s why it is so important that we abide by our own rules. There are clear rules in the case of Greece. If we had not acted, we would have been asked why we were not abiding by the rules.

The ECB also approved additional ELA (emergency liquid assistance) loans for Greek banks at its meeting. Didn’t that reduce the effectiveness of its decision?

This is the usual procedure, as it has been applied in many other countries – for example, in Slovenia in 2013 and 2014, when two of our banks needed ELA loans. The rules are very clear in this respect.

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