site.btaGERB to Reconsider Support for Rehabilitation of Corporate Commercial Bank

GERB to Reconsider
Support for Rehabilitation of
Corporate Commercial Bank


Sofia, October 31 (BTA) - In a statement in Parliament GERB
leader Boyko Borissov said that the party may reconsider its
position vis-a-vis a decision the parliamentary Ad Hoc Budget
and Finance Committee adopted on Wednesday on the troubled
Corporate Commercial Bank (Corpbank). Borissov said he will ask
a meeting of GERB's parliamentary group on the issue.

Parliament Friday held a discussion of the proposals concerning
Corpbank the parliamentary Ad Hoc Budget and Finance Committee
made on October 29.

The Ad Hoc Committee approved a four-point decision which
proposes to scrap the rule for automatic bankruptcy of a bank
that lacks capital adequacy. It also gives Parliament until
November 6 to adopt legislative amendments making it possible to
pay out guaranteed deposits in line with EU legislation, as
well as to revise the Credit Institutions Act to require the
Bulgarian National Bank (BNB) to take action for strengthening
banks when their own funds become negative. Without this
decision, Corpbank should forfeit its licence within five days
after reporting negative capital (which is expected to happen at
the end of October).

The decision drew mixed comments, with some approving it as an
attempt to bail out the bank while others believe that the only
effect it will produce is a further withdrawal of assets.

In his Friday statement Borissov agreed with arguments against
the decision voiced by Volen Siderov (Ataka), Roumen Gechev
(Bulgarian Socialist Party - Left Bulgaria), and Martin Dimitrov
(Reformist Bloc). BNB Governor Ivan Iskrov too took a stand
against a proposal of three of the investors in the bank to
rehabilitate it with the aid of the State. Iskrov justified his
position saying that the rehabilitation according to this plan
will cost more public money than declaring the bank insolvent.

Borissov described the investors' proposal presented by Iskrov
as "a mean little note" and said that giving additional time
during which depositors in Corpbank with deposits above the
guaranteed minimum could obtain their money is "a waste of
time". Borissov blamed the leadership of the central bank for
the current situation and the lost time.

The opponents of the project argue that it provides security to
bankers that no matter what they do, the taxpayer will
ultimately foot the bill. MORE