Bulgarian Banks to Be Held Liable for Trade Defamation

The Bulgarian National Bank may be authorised to downsize or rule out bonuses of bank executives. File photo

Banks distributing false information which damages the reputation of their competitors will be subject to fines, following amendments to the Credit Institutions Act prepared by the Bulgarian Finance Ministry.

A first offence carries a penalty of BGN 50 000 - 200 000, while a second offence is subject to a fine of up to BG 500 000.

At present, natural persons spreading defamatory allegations face a fine of up to 10 000.

Media outlets broadcasting or publishing misleading information face a fine of up to BGN 10 000 if the source is a natural person and a fine of up to BGN 150 000 if the informer is a legal entity.

Under another proposed provision, the Bulgarian National Bank (BNB) will have a say on bonuses of bank executives.

The central bank will be authorized to restrict or reject the payment of bonuses if it finds that a bank has problems with its own capital.

The measure is introduced in line with EU norms stipulating that additional payments to directors of banks and other licensed public financial institutions (insurance companies, pension funds, investment intermediaries) can be downsized or waived.

The step is a continuation of amendments introduced in a 2010 ordinance of BNB under which 40% of the bonuses of bank CEOs may be deferred for a period of 3 years, if the need arises.

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