New governor of Bulgaria’s central bank to get salary much lower than predecessor

Recently-appointed central Bulgarian National Bank (BNB) governor Dimitar Radev will get a monthly salary of 15 368 leva (about 7857 euro) – a far cry from the 45 000 leva monthly pay it is said was handed to his predecessor Ivan Iskrov.

Iskrov, who was central bank governor from October 2003, stepped down earlier in July ahead of the end of his term in office, with Parliament voting unanimously to accept his resignation and with Radev elected to start a new term under revised legislation.

BNB’s board said on July 30 that the deputy governors of the central bank – who were voted into office on July 29 for six-year terms – would be paid 13 173 leva a month while other board members would get 4391 leva a month.

Until now, the pay handed to BNB bosses was not made public but the board decided on July 30 to disclose the salaries. The governing council said that the salaries were calculated according to average monthly remuneration of heads of banks in Bulgaria.

At the time of Iskrov’s departure, independent MP Velizar Enchev tabled a proposal to disclose the salaries of central bank executives – and to cut these salaries drastically. Enchev told Parliament that Iskrov had been given a salary of 45 000 leva monthly, and deputy governors about 40 000 leva a month.

This caused critical comments among the public, including claims that this showed that Iskrov had been paid a salary much higher than that, for instance, of the head of the US Federal Reserve.

On July 29, the Reformist Bloc, the centre-right coalition that is a minority partner in the coalition government, tabled a motion calling for drastic cuts to the pay of BNB bosses.

The Reformist Bloc wanted to see the salary of the head of BNB set at a rate of 95 per cent of that of the Speaker of the National Assembly, who currently gets 4185 leva a month, and in turn, the three deputy governors of the central bank to each get a salary 90 per cent of that of the governor.

In other moves on July 30, the BNB governing council adopted an independent assessment of the state of banking supervision by the central bank, prepared by the International Monetary Fund and the World Bank, and proposed that the final version of the report should be prepared by the end of August 2015, to be the basis of a plan to reform and strengthen banking supervision by BNB.

This plan would be publicly announced by the end of September 2015, BNB said.

The governing council said that the process of reviewing the quality of assets in merchant banks also was being officially launched. As a first step in this process, the BNB board approved a tender procedure for the selection of an independent external consultant on the organisation and conduct of the review.

The performance of Bulgaria’s central bank and its banking supervision during the era of the now-departed Iskrov came under widespread criticism in the light of the collapse of what had been Bulgaria’s fourth-largest lender, Corporate Commercial Bank.

(Photo: Clive Leviev-Sawyer)



The Sofia Globe staff

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