site.btaCentral Bank Accuses Trade Unions, Employers in Unfounded Media Attacks

Central Bank Accuses Trade Unions, Employers in Unfounded Media Attacks

Sofia, October 3 (BTA) - The use of unfounded media attacks
against the Bulgarian National Bank (BNB) and the systematic
attempts to exert pressure and compromise the central bank's
independence, as means to communicate with the Bulgarian public,
neither helps for resolving the case with Corporate Commercial
Bank (Corpbank) and Commercial Bank (CB) Victoria, nor for
safeguarding the trust in the banking system, reads a letter by
BNB Governor Ivan Iskrov, published on the central bank's
website on Thursday.

The letter comes as an official response to the nationally
represented trade unions and employer organizations, in relation
to their September 30 position regarding the sale of CB
Victoria's credit portfolio.

According to Iskrov, such an approach does not correspond to the
seriousness of the matter, which calls for a responsible and
professional attitude. Iskrov said that presenting BNB's actions
in a wrong way is to the detriment of the Bulgarian public's
interests. Despite the declared intentions and various ideas,
the central bank has not received a single legally justified and
structured proposal from the trade unions and employers about
the Corpbank banking group, which would be useful and would help
resolve the case, reads Iskrov's letter. It is addressed to the
Bulgarian Industrial Capital Association, Bulgarian Industrial
Association, the Bulgarian Chamber of Commerce and Industry, the
Confederation of Employers and Industrialists in Bulgaria, the
Confederation of Independent Trade Unions in Bulgaria (CITUB),
and the Podkrepa Confederation of Labour.

Iskrov further recalls that BNB issued a press release on
September 16, saying that the conditions for placing Corpbank
and CB Victoria under special supervision are still in place.
Corpbank was placed under special supervision due to a shortage
of liquidity, while CB Victoria does not have liquidity assets
eligible under BNB Ordinance No 6, against which it could
receive liquidity from the BNB pursuant to the
lender-of-last-resort rules, the letter reads.

Iskrov referred to BNB's earlier press release: Regardless of
the fact that the assessment of CB Victoria EAD's assets and
supervisory reports indicate that to date the bank meets the
regulatory requirements for capital adequacy, the bank cannot be
granted state aid because the authorization of such aid by
Directorate General for Competition of the European Commission
(EC) requires that CB Victoria EAD be considered as part of the
Corpbank group and the requirements for state aid must be
fulfilled at the group level.

Conservators have until October 20th to submit a report to BNB
on whether the highest price offered covers all of CB Victoria's
obligations to creditors and depositors. There is a chance that
a final decision to sell CB Victoria bank's credit portfolio
may not be made. An analysis by BNB's Governing Council will be
made first, which will take into account the value of the
received offers, the results of the negotiations with EPIC (a
financial consultant representing a consortium between Oman's
State General Reserve Fund, other unspecified shareholders and
potential investors) as a representative of the largest
shareholders of that bank, as well as the final approach towards
the Corpbank banking group, which will be adopted, Iskrov
noted.

On September 30, trade unions and employers voiced their
disapproval of the sale of CB Victoria's credit portfolio,
because it may lead to the bank not being capable of resuming
its work. The organizations said that they may ask for Iskrov's
resignation as BNB Governor if this happens.