The European Central Bank (ECB) has named six Bulgarian banks that will be subject to a comprehensive assessment.
Officially announced on November 12, the assessment will consist of an asset quality review (AQR) and a stress test (ST), and follows a request Bulgaria made in July for closer cooperation with the ECB with the goal of participating in the Single Supervisory Mechanism (SSM).
The Bulgarian banks to be assessed include:
- UniCredit Bulbank AD
- DSK Bank EAD
- United Bulgarian Bank AD
- First Investment Bank AD
- Central Cooperative Bank AD
- Investbank AD
The list includes Bulgaria's three biggest banks by assets and three locally owned banks, two of which had the worst stress test results during the 2016 industry-wide AQR/ST exercise. According to the ECB, the assessment process will start in November 2018 with a published report ready by July 2019.
The comprehensive assessment is part of Bulgaria's commitment to participate in the SSM and join the European Exchange Rate Mechanism (ERM II).
Recent other initiatives to this end include the introduction of a new bill to parliament for amendments to the Bulgarian National Bank Act. Bills for the amendment to the Credit Institutions Act and the Bank Recovery and Resolution Directive Act, are expected to go to parliament before the end of the year.
These amendments aim to align the legal framework, regulating the Bulgarian National Bank and Bulgarian credit institutions, with the rules and regulations of the SSM.
For more information on this eAlert, please contact: Elitsa Ivanova and Konstantin Stoyanov.