World Wide
Slovenia Parliament Passes New Law Allowing Investor Compensation
Slovenia's new law allows investors to claim up to 60% of €1 billion losses from 2013 bank rescue.
Key Takeaway
- Slovenia's parliament passed a new law allowing investors to claim compensation for €1 billion losses from the 2013 bank rescue.
- The new legislation shifts financial responsibility to the state, with potential partial reimbursement from the central bank.
- Investors can recoup up to 60% of their losses, enabling over 100,000 people to file class-action lawsuits.
New Compensation Law Approved
Slovenia's parliament has passed a new law allowing investors to seek compensation for losses incurred during the financial sector rescue over a decade ago. The legislation, approved by 46 members of the 90-seat parliament in Ljubljana on Thursday, aims to address grievances from investors who claim they lost approximately €1 billion ($1.1 billion) due to writedowns imposed by the central bank. These writedowns were part of a €3.2 billion plan in 2013 to save the country's largest lenders.
Previous Law Criticized
A previous version of the compensation law faced significant criticism from the European Central Bank (ECB) for violating euro-area rules. This earlier legislation, which would have required the Bank of Slovenia to cover the compensation, was eventually annulled by the Constitutional Court. The new law, however, shifts the financial burden to the state, which retains the option to seek partial reimbursement from the central bank.
Investor Compensation Details
Under the new legislation, investors can seek to recoup up to 60% of their losses. The law also opens the door for more than 100,000 people to file class-action lawsuits, providing them with full access to data related to the financial system bailout. This measure is seen as a significant step in addressing the long-standing grievances of investors affected by the 2013 financial rescue plan.
