Trust Is the Foundation of the Financial System

Capital needs opportunities. Innovation requires a willingness to take risks. Both depend on trust. 

How can we build a financial ecosystem that is competitive, secure, innovative and attractive to investment? This was the central question at the AmCham Business Breakfast entitled Who Pays the Price of Risk? Capital, Competitiveness and Financial Markets, which brought together representatives of the financial sector, business and government under the auspices of the AmCham Slovenia Finance Commission. 

The future of finance, investment and competitiveness was discussed with Ajša Vodnik, MSc, CEO of AmCham Slovenia, by David Capezza, Chief Risk Officer, Visa Europe, Paola Papanicolaou, Head of the International Banks Division at Intesa Sanpaolo, and Andrej Šircelj, MSc, Minister of Finance of the Republic of Slovenia. The discussion also included Mira K. Veljić, Director of ZDU GIZ, Benjamin Jošar, President of the Management Board of ZDU GIZ and President of the Management Board of Triglav Investments, and Stanislava Zadravec Caprirolo, MSc, Director of the Bank Association of Slovenia. 

From capital markets and retirement savings to artificial intelligence, digital payments and regulation, the discussion repeatedly returned to the same issue: trust. 

There Is No Innovation Without Risk 

David Capezza placed risk at the heart of the discussion. Innovation, investment and growth always involve a certain degree of risk. The key question is therefore not how to eliminate risk, but how to understand and manage it responsibly: “If we want to focus on innovation, investment, growth and opportunities, we must also embrace risk.” 

According to Capezza, the future of financial services will increasingly be shaped by data, predictive analytics, artificial intelligence and new payment solutions. However, the speed of development alone will not be enough. New technologies will need to be secure, reliable and trustworthy. Capezza highlighted Slovenia as an environment that has already demonstrated its ability to adopt new technologies and payment methods quickly. A smaller market can be an advantage in this respect if it enables the faster introduction of solutions that can later be rolled out more widely. 

With the rapid development of artificial intelligence, the question of how to manage the risks of technologies that are advancing faster than traditional decision-making and regulatory processes is also becoming increasingly important. User trust will have a significant impact on how quickly new financial services and solutions become part of everyday life. 

Europe Has Capital. The Challenge Is Where to Direct It. 

One of the central themes of the discussion was European capital. The speakers stressed that the main problem is not a lack of capital, but the fact that a large share of savings does not reach productive investment, innovation and companies with growth ambitions. 

Mira K. Veljić pointed out that Europe will need enormous amounts of capital for the green and digital transitions, defence, infrastructure, artificial intelligence and the growth of European companies. Banks will continue to play an important role in financing, but their balance sheets alone will not be able to meet all needs. We therefore need stronger capital markets and more effective channelling of European savings into long-term productive investment. 

This issue is particularly important for Slovenia, where a large share of household savings remains in bank deposits. Veljić therefore raised the question of how tax policy, the pension system and other measures could encourage more investment in capital markets, and what role investment and pension funds could play in this process. 

Paola Papanicolaou placed the discussion in a broader European context. European households hold approximately EUR 10 trillion in savings in bank deposits, while Europe faces an annual investment gap estimated at EUR 700 to 800 billion. 

Europe therefore needs a stronger link between savings, capital markets and investment. This is not a choice between banks and capital markets. We need both. Banks remain an important source of financing for companies, infrastructure and the economic transition, while more developed capital markets enable greater financing capacity, risk sharing and new opportunities for growth. But money only moves when trust exists. “Trust is the foundation of the financial system,” Papanicolaou emphasised. 

Companies, banks and investors need clear rules of the game and stable conditions that enable long-term planning and investment decisions. Financial literacy is also an important part of this, not only for individuals but also for companies seeking to grow and operate across market borders. 

Regulation Must Build Trust, Not Bureaucracy 

A significant part of the discussion focused on how to ensure the security of the financial system without holding back innovation. Europe needs clear and as uniform as possible rules that provide security while allowing companies to develop new business models, use technology and expand into new markets. Common rules are also important for companies operating in several countries, as they reduce complexity and make expansion easier. 

Stanislava Zadravec Caprirolo, MSc, Director of the Bank Association of Slovenia, also drew attention to increasing regulatory requirements. Banks today face geopolitical risks, cyber threats, digital transformation and financial crime simultaneously, while also having to provide accessible financing to businesses and households. 

Regulatory complexity, capital requirements, reporting obligations and frequent changes to the rules also affect the cost and accessibility of financing. The question posed in the title of the event therefore quickly moves from theory into practice: who ultimately pays these costs? 

Slovenia Needs Stability and Predictability 

Andrej Šircelj, MSc emphasised the importance of developing the capital market, reducing administrative burdens and strengthening financial literacy, particularly among young people. According to him, system stability is crucial for long-term investment decisions: “The system must be stable.” 

Frequent changes to the rules and an unpredictable business environment make long-term planning more difficult and influence the decisions of companies and investors. Šircelj also announced further changes in the areas of capital markets, procedural simplification and the tax system, and highlighted the need to reduce the tax burden on labour. 

The results of a survey among event participants also showed that the business community sees high taxation of labour and bureaucracy as major challenges to Slovenia’s competitiveness. 

For many years, the AmCham Slovenia Finance Commission has identified a predictable and development-oriented tax environment, a social security contribution cap, broader personal income tax brackets, capital market development, and measures enabling domestic capital to be channelled more effectively into economic development as key priorities. 

Among the 20 Most Competitive Countries 

Benjamin Jošar focused the discussion on competitiveness around a very concrete objective. He identified the predictability of regulation and the overall business environment as one of the key structural changes needed, together with market-oriented regulation and a level playing field. 

Since competitiveness cannot be improved through a single tax or regulatory measure, he proposed a more ambitious shared objective: for Slovenia to rank among the 20 most competitive countries in the IMD World Competitiveness Ranking within the next five years. 

In his view, such an objective could transcend individual political terms, bring key stakeholders together and provide clearer direction for decisions concerning taxation, regulation, investment and the development of the business environment. 

Alongside capital, regulation and technology, people remain the most important factor. The speakers highlighted talent, talent retention and Slovenia’s ability to attract top experts and corporate development functions as important elements of future competitiveness. 

As Papanicolaou emphasised, technology remains primarily a tool, while people are companies’ most important capital. In a rapidly changing environment, salaries and taxes are therefore not the only important factors. Opportunities for development, learning and career advancement also matter. 

Slovenia has the expertise, advanced financial infrastructure and the ability to introduce new solutions quickly. To turn this potential into more investment, innovation and high value-added jobs, we primarily need an environment in which companies, investors and individuals can plan for the long term. 

Photo:

Matej Mišič