Interim Parliamentary Budget Committee Votes To Save KTB

From left: BNB sub-governors Boryana Pencheva and Kalin Hristov, Governor Ivan Iskrov and GERB MP Menda Stoyanova. Photo: BGNES

The interim parliamentary budget committee approved amendments to the Credit Institutions Act, obligating Bulgaria's Central bank (BNB) to save banks whose capital becomes a negative quantity, reports the bTV national channel.

After four hours of debating, the committee approved a draft project for saving the troubled Corporate Commercial Bank (KTB).

The GERB MPs who tabled the amendments proposed the removal of the so-called “automation”, meaning that BNB must automatically take away the license of a bank whose capital has become a negative quantity.

The proposal was disapproved by the members of the committee from the Bulgarian Socialist Party (BSP) who said it was pointless to save KTB. “It is unthinkable from economic point of view to expect someone to pour billions into a bank in such state, or to use budget money, considering its deficit” Rumen Gechev said.

BNB Governor Ivan Iskrov also objected strongly to the new obligation of the Central bank and pointed out that in all EU countries the troubled banks were saved with money from the state budget.

The committee also voted that by November 6 the National Assembly must pass amendments allowing the immediate payment of the guaranteed deposits, under the conditions and deadlines provided for in the EU law.

Meanwhile, the suspended directors of KTB published yet another letter to the media, entitled “The Report Is A Manipulation”.

Unlike previously, this time the letter was not anonymous, but signed by Orlin Rusev, Ialian Zafirov, Georgi Hristov and Aleksander Pantaleev.

In their letter the directors stated that BNB presented to the National Assembly a report full of blatant lies.

“In the past week the public was purposefully misled and lied to about a “hole” of BGN 4.2 B in KTB,” the letter said. “This digit, however, was not randomly picked. When you subtract from it the bank's capital, which is BGN 700 M, you get a net negative capital of exactly BGN 3.5 B – the sum announced by BNB Governor Ivan Iskrov four months ago.”

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