Bulgaria to Set Aside BGN 1.5 - 2 B to Protect Savings at KTB - FinMin

Finance | July 11, 2014, Friday // 15:25|  views

Bulgaria's Finance Minister Petar Chobanov

Events at Corporate Commercial Bank, which is to be stripped of license by central bank BNB, will not affect citizens' assets, Bulgarian Finance Minister Petar Chobanov stressed.

Between BGN 1.5 and 2 B are to be spent to avert any impact of the bank's insolvency on savings, website Dnevnik.bg quoted him as saying.

Chobanov told lawmakers at an extraordinary session at Parliament's Budget Committee (also attended by Bulgarian National Bank (BNB) Governor Ivan Iskrov) that legislative changes would be introduced raising the cap of Bulgaria's debt, and options to issue a fresh emission were to be added into the amendment proposals.

He explained that, with the latest developments in sight, there was a likelihood for the liquidity support for KTB to surpass the 3% limit of the national budget deficit.

The three-percent threshold is a restriction adopted at an EU level as part of a Fiscal Compact signed by leaders in March 2012.

The Finance Minister's comments were in response to opposition GERB MP Ivaylo Moskovski's question whether an excessive deficit procedure could be triggered by the EU in case of a large-scale state injection to protect KTB customers' money.

"Even if this happens, it will be a one-time event and will not be repeated next year," the minister added.

Another GERB lawmaker, Menda Stoyanova, who was the Budget Committee Chair in the 2009-2013 government, warned that only BGN 2.1 B are available at the Deposit Insurance Fund (DIF), the instrument to be used to safeguard all client deposits after transferring them into KTB subsidiary Credit Agricole Bulgaria.

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Tags: Petar Chobanov, KTB, Corporate Commercial Bank, budget committee, DIF, Ivaylo Moskovski, Menda Stoyanova, Credit Agricole Bulgaria, liquidity support, excessive deficit procedure, deficit, fiscal compact, BNB, Ivan Iskrov


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