ABSTRACT
The core of the financial regulation for the new period was set by the Banking Act 1999 which was passed assuming that Slovenia would become a member state of the European Union (EU) and EMU. The Bank of Slovenia (BS) opted for prevention of excessive real appreciation as the major goal, leaving disinflation to be handled by increased competition. The new Bank of Slovenia Act established the core aim of the BS as price stability. While ensuring price stability, the BS should also support general economic policy and promote financial stability while adhering to the principles of an open market economy and free competition. The new Slovenian government, installed after elections, began cautious preparation for a likely collapse of Yugoslavia by gradually acquiring control over its economic policy and economic system. The creation of the monetary system was interrupted for three months in July 1991 by the Brioni ceasefire to allow for negotiations on the future of Yugoslavia.
