ABSTRACT
Slovenia entered its two largest economic crises of the twentieth century, which had profound effects on the banking sector, in very different institutional environments. During the first crisis, between the wars, Slovenia constituted two regions (Ljubljanska oblast and Mariborska oblast) within the Kingdom of Serbs, Croats and Slovenes and, after 1929, the territory of Dravska banovina within the renamed Kingdom of Yugoslavia. In this territory of 15.85 thousand square kilometres, the population increased from 1.06 million in 1921 to 1.21 million in 1938. In the second crisis, at the end of the 1980s, Slovenia was a federal republic in SFR Yugoslavia; it became an independent country, for the first time in its history, on 25 June 1991. Both its territory (20.2 thousand square kilometres) and its population (1.99 million people) had increased significantly in the interval of sixty years. At the same time the country’s Gross Domestic Product (GDP) increased immensely, although comparison is difficult. The GDP of the whole ‘First Yugoslavia’ was around US$1 billion at that period, of which Slovenia’s share did not exceed 25 per cent. The GDP of independent Slovenia during the 1990s increased from US$12 to US$20 billion, half of it due to the revaluation of domestic currency. Institutional change also took Slovenia in different directions between
these two periods. At the start of the first period, Slovenia was transformed from the least developed region of the old Austrian Empire to the most developed region in the new Yugoslavia. In the second period, Slovenia was evolving from the most developed republic of the second Yugoslavia towards becoming one of the least developed economies in the enlarged European Union. How much will the trade patterns and the fortunes of the banking sector follow previous patterns of change? This may mean the return to concentration in the primary sectors and a stronger import dependence (in technologically advanced industries and some services,
including trade and finance) on more developed Western European countries, particularly Slovenia’s immediate neighbours. Which similarities and differences can be identified in the banking sector
during both of these periods? In both periods there was a sharp decline of economic activity. Slovenia’s GDP decreased during the crises years by almost a half in 1930s and 22 per cent in 1990, deep enough declines to describe these crises as depressions and not only as recessions. But by almost all other accounts the two periods differ significantly: in the external economic environment, in the country’s position in the world, in internal institutional arrangements, in the causes and consequences of crises, and in the renewals which followed.
