Parliamentary Finance Committee Holds
Hearing of Four Central Bank Governor
Nominees


Sofia, July 9 (BTA) - The parliamentary Budget and Finance Committee Thursday held a hearing of the candidates for the position of governor of the National Bank of Bulgaria (BNB). Four candidates have been nominated for the job: Dimiter Radev of the IMF who was nominated by GERB, Grigoriy Vazov who is rector of the Higher School of Insurance and Finance and was nominated by the Patriotic Front, Bisser Manolov, a former ranking officer in the bank deposits insurance fund and nominated by the Reformist Bloc, and Viktor Yotsov, a former central bank expert nominated by ABV.

After the hearing, 40 minutes for each candidate, the Budget and Finance Committee will prepare a report for the plenary before the nominations are put to the vote.

The winning candidate will have to attract more than half of the votes. Out of two candidates with such a result, the one who has more votes "for" will win the election.

Following are the highlights from the hearing of the four in chronological order.

Bisser Manolov

Entry in the Eurozone and the Single Supervisory Mechanism (SSM) are the top priorities for Bisser Manolov. He argued that Bulgaria should join the SSM right after an assessment of the quality of assets and stress tests.

Bulgaria should start preparing a plan for joining the Eurozone. Had Bulgaria been a member of the Eurozone, it could have used financing from the European stabilization mechanism to solve the 2014 crisis in its banking system, he said. He also mentioned that the adoption of the euro as the currency in Latvia has caused a 15 per cent surge of foreign investment.

Membership of the Eurozone is something of an insurance for the national financial system and joining the SSM is an "insurance" for the banking system.

Manolov believes that the early warning system should be removed from the BNB Banking Supervision Department and moved to the Managing Board to make sure the Managing Board is not left to take decisions at critical moments without having the necessary information.

Viktor Yotsov

The immediate priority is to restore confidence in the BNB supervision department, said Yotsov. He added that an institution is as strong as its weakest link and BNB's weakest link was its banking supervision unit.

There certainly have to be structural and personnel changes in the banking supervision department and remote supervision will have to be strengthened.

It is important to strike a balance between the public interest, on of the one hand, and banking and commercial confidentiality, he said.

He argued that Bulgaria should work towards joining the Eurozone and the SSM.

In the long term, it should be considered whether banking supervision should remain within the central bank or removed from it and merged with the financial supervision to create a single supervision authority.

Only an independent central bank can be efficient and independence is not a goal per se: the central bank should be a trusted advisor to the government and the whole society.

Grigoriy Vazov

Listing the urgent tasks he would undertake if he is elected, Vazov mentioned changes in the BNB Act concerning the functions and tasks of the Governing Council, and the subordination directly to the Governing Council of the unit in charge of evaluating the risks before Bulgaria's economy and banking system.

According to Vazov, the attacks against the currency board will continue, as shown by all analyses, because the Currency Board Act still contains a reserve that has not been touched and attracts a very serious interest. Therefore, very serious measures should be taken to ensure the peaceful functioning of the currency board until Bulgaria's entry in the euro zone, he said.

He voiced strong disagreement with the planned stress tests of Bulgaria's banking system, because foreign teams will arrive and information leakage will follow. In his words, Bulgaria has enough renowned consultancy and banking companies which can elaborate this analysis, and he guarantees they are not corrupt.

"I am very critical towards the competency of many of the EU experts. I do not trust them and I will express my opinion once I see the information on which their conclusions are based," he noted.

Vazov also called for a stronger role of banks with Bulgarian capital because they are an element of the national security.

Dimiter Radev

Radev listed as his three groups of priority tasks the strengthening of banking supervision, the creation of a framework for solving problems in the banking sector, and the evaluation of commercial banks' assets.

As part of the preparation for Bulgaria's entry in the Eurozone and the SSM, Radev said he will demand that two principles be observed: optimal balance between capabilities and responsibilities that Bulgaria can assume, and prevention of any form of erosion of BNB's control functions ahead of the full membership in the euro zone. He explained that in the pre-accession phases there will be incentives for the mother banks in the euro zone to compete with their branches in Bulgaria. "Such a development is unacceptable in view of our interests," Radev said.

He listed the action he intends to undertake in order to make the central bank's statistics more reliable for foreign investors, as well as to make easier the transactions with the European payment system and the single deal settlement system. Radev voiced support for BNB's joint venture with France's Francois-Charles Oberthur Group in the BNB Printing Works.

Taking a journalist's question, Radev said that the frequency of bank checks should correspond to the risk each bank bears - a check once every two years when the risk is small - and to the central bank's capacity.

PK/LN, DS
/ДЛ/