site.btaTaxing Banks' Excess Profits Carries Significant Risks for Bulgaria's Financial Stability, BNB Governor Says

The proposal to tax banks' excess profits carries very significant risks not so much for the banking system, but for the economic activity and financial stability of the country, said Bulgarian National Bank (BNB) Governor Dimitar Radev, who attended on Friday a celebration organized by the Association of Banks in Bulgaria (ABB) on the occasion of Bankers' Day.

Taxing banks' excess profits is one of the revenue measures announced by caretaker Finance Minister Lyudmila Petkova in next year's State Budget. Radev argued that this proposal will result in limitation and appreciation of loans, which will impact negatively everyone - banks, businesses, households and especially the Budget.

"The banks contributed BGN 1.2 billion to the budget this year and the demand will cost them another BGN 1 billion, which means it will take away the financial stability of the country," warned the BNB Governor.

He congratulated the bankers on their professional holiday and thanked them for their good performance.

"BNB is a stable bank and guarantees the economy and the stability of the country. BNB is also the closest to the European Central Bank," Vice President Iliana Iotova said at the ceremony. She argued that the Bulgarian banking system is "the most stable among the stable" in difficult political times.

The country's gross domestic product growth is 2.3%, which is higher than the European Union average and this is mainly due to the successful formula of balanced and responsible lending introduced by Bulgarian banks, said ABB Executive Board Chair Petya Dimitrova.