The Bulgarian National Bank (BNB) has adopted a new regulation outlining the framework for providing emergency liquidity support to solvent banks once Bulgaria joins the Eurozone. As the institution stated, this decision was made during the regular meeting of the BNB Management Board.

The regulation specifies the conditions, collateral requirements, and procedures under which the BNB can extend emergency liquidity assistance to banks. This measure aligns with Eurozone practices, where central banks can support credit institutions not only through monetary policy operations but also, in exceptional cases, through emergency liquidity aid, according to the European Central Bank's guidelines.

Under the new rules, the BNB is authorized to offer liquidity support to solvent banks without legal proceedings by either selling received collateral or acquiring ownership of pledged assets. This process allows the Central Bank to secure claims arising from the provision of such emergency liquidity support, as detailed in Paragraph 1 of the relevant article of Bulgarian law.

The newly adopted regulation aims to ensure that the BNB can efficiently manage liquidity crises within the banking system, providing financial stability as the country transitions into the Eurozone.

Source: Nova TV