Bulgarian National Bank (BNB) governor Ivan Iskrov nominated Dimitar Kostov, currently deputy governor in charge of the BNB banking department, to take over as deputy governor in charge of bank supervision, the central bank said on January 29.
By law, BNB deputy governors are nominated by the central bank governor and appointed by Parliament. BNB said that Kostov “is well-known and respected” both in Bulgaria’s banking sector and international financial institutions.
Kostov is currently serving his second six-year term as deputy governor in charge of the banking department, a position he has held since 2005. Of three deputy governors of the Bulgarian central bank, his position – overseeing banking policy, statistics, accounting and the government debt depository – is often viewed as less crucial than those of the deputy governors in charge of banking supervision and the issue department (which oversees the country’s currency board).
Kostov has been considered the front-runner for the nomination in recent days, with some reports claiming that he has the support of the largest parties in Parliament, enough to secure appointment.
His nomination is unlikely to win universal approval, given that he was finance minister in the socialist government of prime minister Zhan Videnov between January 1995 and February 1997, at the time when Bulgaria went through a banking crisis that saw several lenders collapse, triggering hyper-inflation and the introduction of the currency board in 1997 (after he left office).
The position of deputy governor in charge of bank supervision became vacant last week, when Parliament voted to dismiss Tsvetan Gounev on the grounds that he has been unable to carry out his duties for more than six months. Gounev is under investigation for allegedly failing to exercise proper oversight of Corporate Commercial Bank (CCB), the country’s fourth-largest lender until June 2014, when it was put under BNB administration, with the central bank later repealing its banking licence (for full coverage of the CCB affairs, see The Sofia Globe reporting here.)
If appointed by Parliament, Kostov would serve the rest of Gounev’s six-year term, which expires in June 2019.
(Bulgarian National Bank. Photo: Clive Leviev-Sawyer)