Financial Supervision Commission Chair, ECB Vice-President Discuss Troubled Bulgarian Bank KTB

Stoyan Mavrodiev (L), Chair of Bulgaria’s Financial Supervision Commission (FSC), met with Vitor Constancio (R), Vice-President of the European Central Bank (ECB), on Thursday in Frankfurt. Photo by the Financial Supervision Commission

Stoyan Mavrodiev, Chair of Bulgaria’s Financial Supervision Commission (FSC), met with Vitor Constancio, Vice-President of the European Central Bank (ECB) during a working visit to Frankfurt.

The FSC, a member of the Financial Stability Advisory Council and the European Systemic Risk Board (ESRB), sought the meeting as part of its efforts to help maintain financial stability in Bulgaria and find an optimal solution to the crisis involving Corporate Commercial Bank (KTB, Corpbank).

Bulgaria’s Corporate Commercial Bank was placed under conservatorship by the Bulgarian National Bank (BNB) in June after a bank run. The bank has been closed since then, with depositors having no access to their money, despite the statutory guarantee for bank deposits of up to EUR 100 000.

During Thursday’s meeting with Mavrodiev, Constancio emphasized that cases such as KTB required swift and efficient solutions in order to allow depositors to access their guaranteed funds, at the same time preserving people’s trust in the financial system and the banking system in particular and minimizing the negative effect on the economy in the long term.

Constancio made clear that the ECB was ready to provide expert assistance for the preparation of amendments to banking laws in the case of a request from Bulgaria and the achievement of political consensus on the necessity of such measures.

Mavrodiev suggested that Bulgaria was supposed to treat its accession to the Single Supervisory Mechanism (SSM) and the Eurozone as a strategic national priority.

He claimed that the fulfillment of this goal would help maintain financial stability and ensure greater protection of Bulgaria’s economy against turmoil.

Thursday’s meeting was also attended by Vladimir Savov from the FSC, according to reports of the Bulgarian National Radio.

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