The governor of Slovenia’s central bank has said the country’s banks will need a €4.76 billion recapitalisation to deal with bad debts.
Bostjan Jazbec has said the country's three biggest lenders - Nova Ljubljanska Banka, Nova KBM and Abanka - will need a recapitalisation of more than €3.1 billion.
This will involve around €2 billion in cash and a further €1 billion in loans, he said.
The country's five smaller lenders, who require €1.6 billion between them, will be given until June to raise the capital.
One of the euro zone's smallest economies, Slovenia undertook an external assessment to find how much lending had gone sour since the onset of global crisis revealed how shallow its economic makeover had been.
The government has insisted it can plug the hole in the bank balance sheets alone, without seeking a bailout from the European Union and International Monetary Fund.
Analysts, however, fear a quick fix may only delay the inevitable - Slovenia is expected to remain in recession until 2015, while the banks, many of them state-owned, write down bad debts and sell their stakes in companies.
The government has already received parliamentary approval to recapitalise the banks, of which the biggest three are wholly or partially state-owned, by up to €4.7billion.
A significantly higher price would have set alarm bells ringing in Brussels, with euro zone paymaster Germany particularly reluctant to call on its taxpayers again.
Squeezed between Italy, Austria, Hungary and Croatia, Slovenia slipped away from Yugoslavia in 1991 while the rest of the federation imploded in war.
The country of just two million people seemed the model convert from Communism when it joined the euro zone in 2007 and promptly became the bloc's fastest growing economy, exporting cars, kitchen appliances and pharmaceuticals.
But the global crisis dried up demand, drove up bad loans and exposed how far Slovenia had ducked the shock therapy much of eastern Europe went through with the end of the Cold War.
The state remains in control of around half the economy, through a complex web of ownership that often goes back to the biggest banks. Politically-motivated lending was rife.
"We supported companies at too high a price," a senior Slovenian banker, who declined to be named, told Reuters.
Disentangling the banks could send shockwaves through the economy, which has already shrunk 11% since 2008.
With unemployment at over 12% and rising, Slovenia is desperate to avoid the radical cuts in jobs and benefits imposed in Greece in return for more than €200 billion in aid.
The euro zone, too, fears more complaints that cost-cutting is ruining the job prospects of Europe's youth.
Banks in Slovenia are saddled with an estimated €7.9 billion in bad loans, equivalent to a fifth of national output.
The lion's share is held by the big three state banks, who together admitted to losses of close to €390 million in the first nine months of 2013 and have some of the poorest capital ratios in Europe.
The government plans to ring-fence up to €4 billion in a 'bad bank', leaving healthy banks that would be easier to sell. It needs EU approval to begin the transfer of loans.
Slovenia has raised the retirement age and cut public sector wages.
It also plans a fire sale of national assets, starting with 15 state-controlled firms including Telekom Slovenia, number two lender Nova KBM, flag carrier Adria Airways and Ljubljana international airport.
There is already dissent within the coalition government over the sale of assets that were for years considered sacrosanct. Rifts may deepen if the immediate threat of a bailout is averted.
Alta's Stanovnik said foreign buyers may also be put off by some local laws, including one that forces employers to pay all staff an allowance for lunch and transport to work every day.