COMMENTS ON THE BANKING SYSTEM IN BULGARIA

The amount of 3.3 billion BGN as liquidity support scheme is sufficient for the banking system in Bulgaria, commented the three guests in the BNT morning programme’ The Day begins’: the security expert Tihomir Bezlov, the economic analyst Lachezar Bogdanov and Bisser Manolov, the representative of the Association of Banks in Bulgaria (ABB) in the Bulgarian Deposit Insurance Fund (BDIF).

According to Manolov, the banks in Bulgaria do not actually need external funds because they have sufficient internal resources. The experts’ opinion is that what is needed is the public to stay calm.

Bisser Manolov, a representative of the Association of Banks in Bulgaria (ABB) in the Bulgarian Deposit Insurance Fund (BDIF): “This amount is sufficient. It even may not be necessary. In practice, the state does not need external funds. We have internal resources which are, I would say, rather adequate and the solution can be found within the state. It is important the public to remain calm this week and things will be alright, I have no doubts.”

Tihomir Bezlov, a security expert: “Three billion BNG actually is a significant amount for the size of the affected banks and even if we look at the worst scenarios, such as the ones in Greece, the maximum amounts withdrawn there were about 50% of the deposits, so 3 billion BGN is approximately what we may need.”

Lachezar Bogdanov, an economic analyst: “The most important right now is all the government institutions, all political parties, including the ruling and the opposition and all institutions to give a clear signal that the Bulgarian state is capable to and will fulfill all its obligations to safeguard the interests of the depositors. It is able to do it. The important is the people to have trust that state will do it.”

On 29th June, Bulgaria requested from the European Commission to authorise a credit line at the amount of 3.3 billlion BGN to be provided by Bulgaria to the banking system. The Commission approved a liquidity support scheme to help the banks that the Bulgarian authorities believe became subject to a plot to destabilize the banking system. In the past week, there were runs on two big Bulgarian banks.