Slovakia plans to establish a primary dealership system for 2006, and expects to decide on which banks have made the grade by the end of this year. According to Daniel Bytcanek, director of Ardal, the Slovak debt management agency, between eight and 10 banks will be appointed as primary dealers, made up of a combination of international investment banks that are most active in Slovak debt, and three or four local banks.
Ardal was established in February 2003 to manage Slovak state debt and liquidity. As well as setting up the dealership system, Ardal has two further strategic aims. One is to implement a general ledger accounting system this autumn. The other is to increase its use of derivatives in its debt management activities. "Until now we have only done some simple swaps, but we would like to be more active in the derivatives market," says Bytcanek. "At the moment we use derivatives as little as once a month, but it would be good to be able to use them several times a week to hedge open positions. This wasn't a priority in 2003/04 when we were setting up the agency, but now we are well established it has become more interesting."