Four candidates to compete for Bulgarian c-bank governor post

By bne IntelliNews June 18, 2015

Four candidates were nominated for governor of the Bulgarian National Bank (BNB) by the June 17 deadline. The new governor, who will have to improve the central bank’s reputation and help strengthen the banking system, which is still suffering from the effects of the 2014 turmoil, must be elected by the parliament, with the vote likely to held on July 10. The weakened banking system, following the collapse of fourth biggest lender Corporate Commercial Bank (Corpbank) last June and the deposit run on another top tier lender, First Investment Bank (FIBank), which was rescued by the state, is one of the major constraints to faster growth of the EU's poorest economy.

In addition to Dimitar Radev, a senior economist with the International Monetary Fund (IMF), nominated last month by the ruling CEDB party, its junior ruling coalition partner, the Reformist Bloc, nominated Bisser Manolov, the nationalistic Patriotic Front, which usually supports the government, nominated Grigoriy Vazov, and leftist ABV, which has one cabinet member, nominated Viktor Yotsov.

Radev, who has a 20-year experience at Bulgaria's finance ministry, including as a deputy minister, until 2001 when he joined the IMF, seems to have the biggest support in the fragmented parliament. In addition to CEDB, he is likely to be backed by the opposition MRF and BSP, as well as by part of the Reformist Bloc MPs.

The Reformist Bloc, which comprises three bigger and a couple of smaller right-wing parties, claims its MPs will decide on their vote after hearing the debate between the candidates, their ideas, plans, and strategies. Each lawmaker will be able to vote for more than one candidate.

Manolov, who has been part of the management board of the Bulgarian Deposit Insurance Fund (BDIF) since 2003, most of the time as chairman, was proposed by Bulgaria for Citizens Movement - the party of former European Commissioner Meglena Kuneva, in which he is a member.

Vazov, who is currently President of the private University of finance, business and entrepreneurship (VUZF), has mostly an academic career. Patriotically, he is a relative to one of Bulgaria’s most famous writers, the so-called Patriarch of Bulgarian literature, Ivan Vazov (1850-1921).

Yotsov has worked at the central bank in 1995-2003 and was the country’s representative at the IMF in 2003-2010.

A key task of the new governor will be to appoint a deputy governor in charge of banking supervision after the former head Tsvetan Gunev, was suspended in June amid a probe for failing to perform banking supervision duties, just before the bank runs. 

“With the term of the BNB governor expiring and the selection of a new head of banking supervision pending, timely confirmation of individuals with a clear mandate to support a strong, independent, and accountable BNB is critical”, the IMF warned in March.

Incumbent governor Ivan Iskrov has denied any responsibility for Corbank's collapse although he has been blamed for having close ties with the bank's majority owner, Tsvetan Vassilev, and for covering up manipulations by the lender.

The European Commission has raised concerns "about the existence of banking practices in the domestically-owned part, with potentially significant implications for financial sector and overall macroeconomic stability”.

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