Strenghtening banking supervision and evaluation of banks’ assets are key to successful reform of Bulgaria’s banking sector, a nominee for a new chief of the country’s central bank has said.

According to Dimitar Radev, the collapse of Corporare Commercial Bank, or KTB, has shown that Bulgaria is lacking tools for the restructuring of banks.

"It is important to adopt legislation on the restructuring of credit institutions. Restoring confidence in the Bulgarian National Bank (BNB) goes through a comprehensive assessment of the financial sector, review of asset quality and stress test,” Radev told the parliament’s budget and finance commission on Thursday.

According to a 18-month plan drafted by Radev, the BNB should make the assessment of the financial sector in the second half of next year and the stress test of local banks should be completed by July 2016.

Radev, an economist with experience at the International Monetary Fund was nominated by the governing GERB party.

He welcomed the proposal to set up a coordinating council tasked with preparing Bulgaria for eurozone membership.

“The BNB will actively participate in the work of the council,” Radev said.

The commission heard the four nominees for the position of a new BNB governor on Thursday: Radev, Grigorii Vazov, Victor Yotzov and Biser Manolov.

The term of office of incumbent governor Ivan Iskrov will expire on 10 October. Iskrov submitted his resignation to parliament last month, saying that he will step down on 10 July.

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