Bulgaria Appoints New Central Bank Governor

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As lawmakers attempt safeguard the banking sector from the effects of the Greek crisis, the Bulgarian parliament approved Dimitar Radev as the new head of the nation’s central bank, according to Bloomberg Business. Radev stated that his plan for preserving the banking sector includes three attributes: banking supervision, asset quality management and a bank-crisis management mechanism. The new governor will also support the government’s desire to join the European banking union. Radev was nominated by the GERB party, the nation’s primary ruling entity.


As lawmakers attempt safeguard the banking sector from the effects of the Greek crisis, the Bulgarian parliament approved Dimitar Radev as the new head of the nation’s central bank, according to Bloomberg Business. Radev stated that his plan for preserving the banking sector includes three attributes: banking supervision, asset quality management and a bank-crisis management mechanism. The new governor will also support the government’s desire to join the European banking union. Radev was nominated by the GERB party, the nation’s primary ruling entity.

Many nations will be negatively affected if the Greece situation takes a turn for the worse, but Bulgaria is one of the most vulnerable because 22 percent of the banking sector is owned by Greek lenders, and seven percent of Bulgarian exporters rely on Greek business. Bulgaria is also vulnerable because the country ranks the poorest out of all EU nations. Aside from Greece, Bulgaria is also affected by the Ukrainian conflict, including political and banking crises. Bulgaria has faced its own banking crisis, when one of its crucial banks, Corporate Commercial Bank AD, collapsed in June of last year, forcing the nation to hold early elections. The crisis forced the government to spend four billion lev ($2.3 billion) to honor deposits stemming from the banking collapse. Former bank head Ivan Iskrov was forced to resign because of the fallout and it is believed that Radev will have a stabilizing effect over the banking sector.

Bulgaria’s economy has been in dire straits, and the World Bank predicts that the economy will expand by 1.1 percent in 2015, a downgrade from a previous estimate of 2.4-percent GDP growth. Estimates differ, with the European Commission only expecting 0.6 percent growth, but the consensus is that Bulgaria’s economy is not performing up to speed. However, the World Bank is slightly more optimistic than other estimates, believing Bulgaria’s economy will expand by 2.0 percent in 2016 and 2.7 percent in 2017. Further, UniCredit Bulbank issued a report on Bulgaria, stating that some long-needed structural reforms taking effect this year will boost goods and services in the country, along with aiding in jobs and the overall health of the economy. The labor market is expected to continue making progress, but exports will only improve slightly, despite a weaker euro. Low energy prices will boost the economy, and it may be a determinant factor in increasing private consumption, which will be a key driver in growth. Prime Minister Boyko Borissov wishes to cut the budget deficit from 3.7 percent last year to 3.0 percent in 2015.

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