| Market day in Ljubljana, where change is gradual though EU entry may unleash competition |
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Slovenia is like a snail inside its shell: slow and fearful of the outside world. As the small alpine country prepares for EU membership, the need to conform to EU banking standards is forcing it out of isolation. It is modernizing its banking system, amid political upheaval, while staving off tedious bureaucracy.
"Everything in Slovenia happens a little more slowly than in other countries," says Franjo S'tiblar, chief economist at Nova Ljubljanska Banka. That slowness is delaying reform in three major areas of Slovenian banking: policy towards foreign banks, privatization of the two largest banks, and consolidation of the over-banked system.
Slovenia hasn't openly welcomed foreigners, a sentiment reflected in the banking industry. Only three foreign banks operate in Slovenia, with Bank Austria Creditanstalt having the largest market share.