Bulgarian National Bank (BNB) governor Ivan Iskrov said that he would resign on July 10, asking MPs to have a successor appointed on the same day. In a letter addressed to Parliament and posted on BNB’s website on June 23, he said that such a move would prevent “a vacuum in the leadership of the central bank”.
Iskrov has repeatedly come under harsh criticism for his handling of the Corporate Commercial Bank (CCB) collapse last year and has faced numerous calls to resign. He offered to do so a year ago, but postulated the condition that Parliament first elect his successor – which, by law, MPs could not do without him resigning first.
It remains to be seen whether he will honour his commitment – as he phrased it, “please consider this letter as my tendering of resignation, starting July 10, from the position of BNB governor” – should any of the four nominees put forth for the job muster enough support in Parliament to win appointment on July 10.
Senior officials from GERB, the majority partner in the ruling coalition, have given assurances that the election would go ahead on that date. The party’s nominee Dimitar Radev, a former deputy finance minister who has worked for the International Monetary Fund since 2001, is seen as the favourite to succeed Iskrov, but the other minority partners in the coalition have put forth their own candidates, meaning that Radev’s appointment could require votes from the opposition parties.
Iskrov said that his provisory resignation would give his successor an opportunity to nominate his own team as soon as he takes office, and also called on MPs to fast-track such nominations. By law, deputy governors in charge of the main three departments of the central bank are appointed by Parliament, following the nomination by the BNB governor.
One such position has been vacant since January, when Parliament sacked Tsvetan Gounev, who was in charge of the banking supervision department, on the grounds that he has been unable to carry out his duties for more than six month. (Gounev took a leave of absence last year shortly before CCB was put into administration and is one of several people facing charges of mismanagement for the bank’s collapse.)
Iskrov’s proposed replacement – Dimitar Kostov, who is deputy governor in charge of the banking department – was never put to a vote in Parliament. Kostov’s nomination ran into political headwinds because he was the 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 nomination of Radev, who was one of Kostov’s deputy ministers – Radev also stayed on after the fall of the Videnov government and held the same position in the centre-right cabinet that implemented banking reforms in the aftermath of the crisis – has not faced similar opposition.
Iskrov said that he was hoping that his successor would name a nominee to the vacant job as soon as possible, while also offering a reminder that the election of a new deputy governor in charge of the issue department, which oversees the currency board, was due between July 23 and August 23, given the expiration of the incumbent Kalin Hristov’s term on October 23. (Hristov was once seen as the most likely candidate to succeed Iskrov as governor, but, like the rest of the BNB board, has been tarnished by association by the CCB collapse.)
(Bulgarian National Bank photo: Clive Leviev-Sawyer)