Bulgarian National Bank (BNB) has invited bids for organising and coordinating a process of an asset quality review (AQR) and stress tests of the entire banking sector, a notice on BNB’s website informs.

The selected contractor will also provide expert support to BNB in relation to the separate stages of the review, as well as consult BNB in the process of stress testing. The bidding deadline is September 23. The final AQR results and the outcome of the stress tests must be published no later than August 31, 2016.

One of the contractor’s tasks will be to propose and develop jointly with BNB the methodology of the review. “This methodology shall be based on the ECB-developed methodology for conducting a detailed quantitative evaluation of the assets of the EU banking system, Version 2.0, but it shall reflect the specifics of the domestic market, and shall impose a certain level of conservatism,” BNB said. The risk profile of Bulgaria’s banking system is largely focused on credit risk.

The purpose of the project is to guarantee financial stability and strengthen the confidence in the financial system.

Last June, Corporate Commercial Bank (Corpbank), then the country’s fourth largest lender, suffered a bank run that deprived it of liquidity. It was put under central bank administration and an audit showed a BGN3.75bn (€1.92bn) capital hole. As a result, on November 6 BNB revoked the bank’s licence and it was declared insolvent on April 22. Also last June, Bulgaria’s third biggest lender, First Investment Bank (FIBank), suffered a deposit run, but was rescued by the state.