Bulgaria

The European Union’s banking watchdog has warned that Bulgaria’s authorities have breached European law by continuing to block depositors’ access to their money at a large troubled lender the government seized four months ago, the International New York Times reported. The warning comes after a run on deposits forced the lender, Corporate Commercial Bank, to close in June, leaving tens of thousands of consumers and businesses without access to their cash in the European Union’s poorest member state.

The European Union’s banking watchdog said Bulgaria’s central bank and deposit insurance fund were breaching the bloc’s deposit-guarantee law by not allowing depositors to access their savings at Bulgaria’s Corporate Commercial Bank, The Wall Street Journal reported.

The European Union's banking watchdog is investigating a possible breach of the bloc's deposit-guarantee law at Bulgaria's Corporate Commercial Bank, three months after the lender suspended client payments and the central bank put it under special supervision following a bank run, The Wall Street Journal reported.

What seemed at first to be a short-term banking crisis is looking more like a chronic condition, the International New York Times reported. But the name of the affliction probably does not matter as much to companies and consumers as the money, about $4 billion in all, that has been stranded at a big Bulgarian bank since the government seized it in late June. Most Bulgarian banks are operating as usual.

The majority owner of Bulgaria's troubled Corporate Commercial Bank (Corpbank) said on Monday it was working with Oman's sovereign wealth fund and other interested investors to restructure the lender, Reuters reported. Corpbank's fate has been in limbo since June, when a run on deposits prompted the central bank to seize control of it and close its operations, sparking the worst banking crisis in the poor Black Sea state since 1990s. Tsvetan Vassilev's Bromak owns just over half of Corpbank, the Balkan country's fourth-largest lender.

Bulgaria's central bank has allowed some banking activities to resume at Corporate Commercial Bank (Corpbank) so borrowers can repay loans to the country's fourth-largest lender, officials said on Friday. The bank was hit by a run on deposits in June that led to Bulgaria's biggest banking crisis since the 1990s. Corpbank was placed under the control of the central bank and has since remained shut pending an audit into its books, due to be completed by October, leaving angry customers without access to their deposits.

The fate of one of the biggest banks in the European Union’s poorest country, Bulgaria, remains hostage to a political crisis, which caused the prime minister’s government to resign on Wednesday, the International New York Times reported. The resignation of Prime Minister Plamen Oresharski and his cabinet, which had been expected for weeks, comes as Bulgaria’s worst banking crisis since the 1990s threatens to take an economic toll on local businesses and foreign investors.

Bulgaria is asking the European Central Bank to take over supervision of its lenders after runs on deposits triggered the worst financial crisis in 17 years, Bloomberg News reported. Bulgaria’s central bank has contacted the ECB’s Executive Board to start the procedure to join the Single Supervisory Mechanism, it said in an e-mailed statement today. The request follows an announcement by President Rosen Plevneliev after a meeting with leaders of the country’s biggest parties and senior government officials yesterday.

One of Bulgaria’s biggest banks faces bankruptcy proceedings after the country’s central bank reported that documentation covering the bulk of its loan portfolio was missing, while sacks of cash containing millions of lev had been removed from its vaults, the Financial Times reported. Ivan Iskrov, the central bank governor, said on Friday the banking licence of Corporate Commercial Bank was being revoked, while its healthy assets and liabilities would be transferred to Crédit Agricole Bulgaria, a Corpbank subsidiary that will be nationalised.

The European Commission said on Monday it had approved a Bulgarian request to extend a credit line of 3.3 billion levs, or about $2.25 billion, in support of banks that have come under speculative attack, the International New York Times reported on a Reuters story. “The Commission concluded that the state aid implied by the provision of the credit line is proportionate and commensurate with the need to ensure sufficient liquidity in the banking system in the particular circumstances,” the European Union’s executive branch said in a statement.