Bulgaria Financial Sector Assessment
The authorities have actively pursued restoring credibility in the financial system following the collapse of the system’s fourth largest bank in 2014. To restore credibility, the authorities - in addition to requesting a Basel Core Principles (BCP...
| Main Authors: | , |
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| Format: | Report |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/357901497968905206/Bulgaria-Financial-Sector-Assessment http://hdl.handle.net/10986/27555 |
| Summary: | The authorities have actively pursued
restoring credibility in the financial system following the
collapse of the system’s fourth largest bank in 2014. To
restore credibility, the authorities - in addition to
requesting a Basel Core Principles (BCP) assessment in 2015
and this financial sector assessment program (FSAP) -
conducted an asset quality review (AQR) for banks and
balance sheet review for non-banks, initiated reforms to
Bulgarian National Bank (BNB) supervision and introduced a
new bank resolution function. It is important that the
authorities continue in their efforts to strengthen the
banking sector. The FSAP stress test showed more pronounced
effects, though broadly in line with that of the
authorities, reflecting differences in approaches. While the
financial safety net and crisis management arrangements are
based on sound foundations, further effort is needed to
fully develop the financial safety net’s components. This
includes strengthening the early intervention framework, and
defining joint BNB - Ministry of Finance (MoF) strategies
for liquidity assistance. A more targeted strategy is needed
to address high nonperforming loans (NPLs), which can help
reinvigorate the economy. A number of reforms are necessary
to support the prudent development of the pension and
insurance sector. |
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