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Bulgarian Central Bank Chief Sees Finance-Industry Consolidation 

November 19, 2015

Elizabeth Konstantinova and Slav Okov, Bloomberg Business

Bulgaria’s banking industry faces further consolidation after an asset-quality review and stress tests planned for next year, central bank Governor Dimitar Radev said.

“Market consolidation will be one of the strategic directions in which our banking sector will develop,” Radev, a 59-year-old former International Monetary Fund economist who was elected to his post in July, said in an interview in Sofia on Tuesday. While “there’s interest” in the nation’s lenders, he said it would be “a bit early” to discuss specifics.

Strains on Bulgaria’s banking industry, which has strong links to the crisis-stricken economy of neighboring Greece, were highlighted by authorities being forced last year to rescue the nation’s third-largest lender First Investment Bank AD and to shutter Corporate Commercial Bank AD, the fourth largest. The crisis that included bank runs on the two domestically owned banks triggered early elections in 2014.

The industry is now generally stable, liquid and well-capitalized, Radev said. The collapse of Corporate Commercial revealed “certain weaknesses” and thrust stronger supervision to the “center of our reform efforts,” in line with the so-called Basel principles, he said. Read more

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