The NYT: Political Crisis Jeopardizes Future of Bulgarian Bank
One of the biggest banks in Bulgaria is a "hostage" to a political crisis, which caused Bulgarian PM Plamen Oresharski to resign, writes Georgi Kantchev for The New York Times.
There may be no rescue plan or resolution to the problem with the Corporate Commercial Bank (KTB) soon, as the "worst banking crisis since the 1990's" threatens to hurt business. Foreign-owned banks such as UniCredit Bulbank have remained unaffected by the turmoil.
The main opposition party - GERB - is expected to win the elections scheduled for the October 5. Because of the bank crisis, the party has demanded the resignation of the governor of the Bulgarian National Bank Ivan Iskrov.
After the rescue option to bail out KTB was rejected by parliament, the focus was moved onto private investors who could save the bank. Oman's sovereign wealth fund, which holds 30% of the bank's shares has refused to comment, KTB's second-largest investor - Russia's VTB bank which holds 9% of KTB said that it doesn't have any plans to provide liquidity and capital resources to KTB.
To ease fears of a full-blown bank crisis, the Bulgarian government has sought to join the central European Supervisory Mechanism. If it is accepted, it would be the first country outside the 18 members of the Eurozone to be supervised this way, however some analysts fear the supervision will not actively begin until next year.
Most analysts agree that the Bulgarian bank system is sound with the highest capital reserve ratios in Europe (20%), but letting KTB fail could trigger a snowball effect that could scare away foreign investors for good.
- » Stratfor: Bulgaria Is Balkan Heavyweight, But Eurasian Lightweight
- » Huffington Post: 18 Reasons to Book Trip to Bulgaria ASAP
- » The Globe and Mail: Russia, Turkey Waging ‘Proxy Battle’ in Bulgaria
- » The Independent: Sofia Ranks as Fourth Most Dangerous City in Europe
- » Telegraph: Borovets Is Europe's 'Booziest Ski Resort'
- » The Guardian: Construction of Motorway Threatens Wildlife in Bulgaria's Kresna Gorge
Until the BNB or Government, whoever is running this sham, decides if they are going to revoke the licence of KTB or shut them down no one can claim against the Deposit insurance Policy.
In the policy it clearly states that once the Banks licence has been revoked or the bank declared closed the banking authority then has to nominate a payment bank and those with 100,000 Euros or less can then be refunded, normally within 20 days.
Our problem stems from the BNB not being clear as to whether or not they will close KTB or seek shareholders to come up with a savour plan until that decision has been sorted and set in stone the Deposit Insurance Policy doesn't come into the frame.
I agree with you people need to stand up and voice their opinions but via this media is probably pointless. One or two comments are not enough.
I have written directly to the press department of the BNB but they remain tight lipped and do not respond. Some are outside the KTB branches talking to the media getting themselves into trouble with the police but still the hardship of the people is not getting through to the leaders of this country! There has been treats of strikes but as yet nothing. Some are obviously scared to even comment on sites like this in case it brings troubles to their doors.
The ones being heard are people without accounts in KTB who think that those over the 100,000 Euro figure should not receive anymore than the policy states. If Bulgaria wish to assist thiese businesses and people that's great but do it after it sorts out those whom the policy fits that's the closer argument.
Why are people not directly involved allowed to take part in a poll in the first place! Poll the people with accounts and ask them for suggestions. Where are the shareholders in all this and why are they not speaking out to save their investments and put the bank back on its feet.
The longer it goes on the less will care and only those with businesses and personal deposits will lose. Not only do we not have access to our money we are also losing interest if the account are frozen as of the 20th June. Six months interest will be lost and that's a lot of money.....
What is the answer my friend? What can we do against the parliment and banking system of this country.
I have also written to the British Embassy, but they have written back saying that they can not intervene with another countries banking issues.
So who do we turn to to voice our outrage?
Thank you for the correction (my miss reading or understanding )
I have never seen people so quiet about something like this the acceptance of having to wait six months when a guarantee is in place and some that have accounts really need the money are getting NO HELP ,
WHY are they having to WAIT ?What is the BNB DOING ? I can see no reason to delay payments to those who have salaries paid into KTB , or those who have accounts well blow the set limits of the EU.
Is it just a case that THE FAT CATS IN THE KNOW /POWER /GOVERNMENT ,WILL GET OR ARE GETTING FROM BEHIND CLOSED DOORS Their cash . The lack of information no written letters to account holders etc make this all to much like a cover up job there is nothing OPEN ABOUT WHAT IS GOING ON .
The Bulgarian government ,the owners of KTB Nor the BNB GIVE A TOSS about you or anyone else who has an account at KTB ,
They are perfectly happy as they have all the money THEY NEED as they knew about this and already REMOVED THEIR MONEY .
The WORLD KNOWS but nothing will be done and for those who have accounts with the KTB WELL it will be a very long wait as the government are stepping down and nothing can / will be done until a new government is formed and even then it needs to be discussed so at the EARLIEST you are looking at sometime in 2015 at which time you still may NOT GET A PENNY FROM THEM.
THIS IS BULGARIA?
It the citizens that are the hostages as no one is worrying about how they will survive until this mess is sorted out without any money.
Without access to our money to make withdrawals we can not live, buy food, get to work, pay mortgages, bills etc.
Do the MP of Bulgaria not care how businesses and citizens will survive until Sept.
Why are the BNB not paying out under the Deposit Insurance Policy. Give the depositors their money back...
We are the hostages, at least prisoners get 3 meals a day, we can't even buy food.