IMF advisor tipped to head Slovenian central bank

Slovenian lawmakers will examine Thursday the nomination of International Monetary Fund advisor Bostjan Jazbec as central bank governor for the small eurozone country, amid speculation that it could follow Cyprus in needing a bailout.

The Slovenian parliament's credentials commission will examine President Borut Pahor's proposal to appoint Jazbec after the mandate of current bank governor Marko Kranjec expires in mid-July.

Jazbec, an IMF senior advisor to Kosovo's central bank and associate economy professor at Ljubljana University, has already received the backing of the main parliamentary groups.

If the commission approves Jazbec's candidacy, the full parliament will vote on his appointment at its next session, likely to take place next week.

Slovenia, once a model EU entrant, has struggled against economic recession and problems facing its banks, which are mired in bad debt, prompting concerns that it might be the next eurozone member to seek a bailout from the EU and IMF.

Centre-right opposition spokesman Gregor Kosir emphasised Wednesday that Jazbec favoured the creation of a "bad bank" to restructure the banking sector, a project approved last year by the country's previous government.

A bad bank is a financial entity that takes on risky loans and other assets to relieve banks of the burden, and is destined to be wound down over time.

Prime Minister Alenka Bratusek has said that her government would back the bad bank bill but amend it to reinforce the central bank's role.