site.btaParliament's Budget and Finance Ad Hoc Committee Hears Central Bank Governor Iskrov

Parliament's Budget and Finance Ad Hoc Committee Hears Central Bank Governor Iskrov

Sofia, October 29 (BTA) - The ad hoc parliamentary budget and
finance committee heard Bulgarian National Bank (BNB) Governor
Ivan Iskrov on Wednesday. BNB's report about the events and
actions taken in connection with Corporate Commercial Bank
(Corpbank) and Commercial Bank Victoria, as well as a report by
the Bulgarian Deposit Insurance Fund were presented during the
committee's sitting.

On June 20, 2014, Corpbank suspended all operations after a run
by depositors left it illiquid, and on the same day the BNB
placed it under special supervision for a maximum of six months
to allow a thorough audit and possible restructuring.

On Monday the BNB has submitted to Parliament a report
containing detailed information on the events and all actions
taken and decisions adopted by the central bank with regard to
the Corpbank Group (Corporate Commercial Bank and Commercial
Bank Victoria).

An auditors' report about Corpbank showed that the bank's
capital hole totalled 4,222 million leva.

"BNB's reputation, with or without Iskrov or anyone else from
the central bank's Governing Council, is an exceptionally
important long-term intangible asset, which we all need," Iskrov
told the committee in Parliament.

He said that Corpbank is not an isolated case in the history of
the world. Not in a single case had these countries' central
banks been subjected to such huge and horrible pressure by the
public, Iskrov noted.

Not a single bank in Bulgaria went bankrupt during the global
financial crisis, thanks to BNB's consistent and efficient work,
including its banking supervision, the central bank's Governor
said. According to him, BNB's and the Bulgarian banking system's
huge achievements should not be easily forgotten or written
off.

From June until now, BNB with the support of two governments and
the banks themselves, managed to limit the negative impact on
the remaining banking sector after Corpbank and Commercial Bank
Victoria were placed under special supervision, Iskrov said. It
took huge efforts to safeguard this country's financial
stability and trust in the banks, Iskrov stressed. He quoted BNB
statistics, according to which household and company deposits
in banks in September have already exceeded their levels from
May - just before the Corpbank crisis began.

Ever since Corpbank was placed under special supervision, BNB
has not excluded the possibility to find a market solution for
the troubled bank, Iskrov said, adding that there was a meeting
with key Corpbank shareholders in BNB on Wednesday too.

Iskrov recalled that the analysis and assessment on Corpbank
revealed that an additional provision of 4,222,000,000 leva is
needed. He recalled that Corpbank's conservators were given
until October 31 to present to the central bank the final
financial reports. Iskrov explained that after this is done, the
central bank is legally bound to revoke Corpbank's license,
after which the Bulgarian Deposit Insurance Fund will start
paying back guaranteed deposits within 20 work days.