Interrelationships among Safety Net Participants: The Case of Bulgaria


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IADI Fourth Annual Conference - Taipei, Taiwan, 28 - 29 September 2005.

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Interrelationships among Safety Net Participants: The Case of Bulgaria

  1. 1. Interrelationships Among Safety Net Participants: the Case of Bulgaria Roumyana Markova International Cooperation and PR Dept. Bulgarian Deposit Insurance Fund
  2. 2. Safety Net Participants• Bulgarian National Bank (BNB)• Banking Supervision Department (with BNB)• Bulgarian Deposit Insurance Fund
  3. 3. Bulgarian National Bank• Introduction of Currency Board in mid 1997 - Lender of Last Resort only in systemic crisis - lending facility: the deposit of the Banking Department with the Issue Department
  4. 4. BNB Banking Supervision Dept.• Drafts regulations (approved by BNB)• Supervises banks• BSD Directorates - Supervision Policy and Methodology - Supervision Administration - On-site Supervision - Off-site Supervision and Analysis - Special Supervision
  5. 5. Bulgarian Deposit Insurance Fund (BDIF)• BDIF was established by the Law on Bank Deposit Guaranty passed in April 1998• BDIF is a legal entity effectively operating as of January 1999
  6. 6. BDIF Mandate• Law on Bank Deposit Guaranty (LBDG) - determines and collects banks’ annual and entry premiums - invests its assets in accordance with LBDG provisions - repays the insured amounts of deposits in failed banks• Law on Bank Bankruptcy (LBB) - administers bank bankruptcy proceedings by controlling the trustee
  7. 7. Relationships with BSD/BNB• LBDG requires BNB to provide: - all the information available on the amount of bank deposits and required for calculating banks’ premiums - full current information on the financial status of banks in view of assessing the risk associated with DIS implementation - upon BDIF request BSD may conduct off- and on-site inspections concerning the deposit base and present the findings Memorandum of Understanding, Nov 1999 - upon failure to pay the premium due within 3 months BDIF notifies BNB to undertake the measures prescribed in the Law on Banks
  8. 8. Relationships with BNB• Under LBDG - BDIF drafts regulations for LBDG implementation to be approved by BNB - BDIF Vice Chairman is designated by BNB - BDIF Annual Report is presented to BNB - BDIF administrative expenses budget, together with report on its performance is approved by BNB
  9. 9. Relationships with BSD/BNB• Under LBB: - BDIF appoints trustees from a list kept by BSD - BSD and BDIF give statement of opinion to the court for selling a failed bank as an enterprise - BDIF drafts regulations for LBB implementation to be approved by BNB
  10. 10. Relationships with Association of Commercial Banks• Under LBDG: - BDIF Member of the Management Board is designated by Association of Commercial Banks Letter of Cooperation, Aug 2001
  11. 11. Thank You For Your Attention Bulgarian Deposit Insurance Fund 27 Vladaiska Street, 1606 Sofia, BulgariaTel.: +359 2 953 1217, 953 1318; Fax: +359 2 952 1100 E-mail: Internet: