Bulgaria’s path to euro: ECB to directly supervise five Bulgarian banks

The European Central Bank (ECB) has announced the list of banks in Bulgaria which will be subject to direct supervision by the ECB, as of October 1 2020, as part of the process towards Bulgaria’s accession to the euro.

The credit institutions that will be directly supervised are UniCredit Bulbank, DSK Bank, United Bulgarian Bank, Eurobank Bulgaria, and Raiffeisenbank Bulgaria.

In a media statement, central Bulgarian National Bank (BNB) said that the ECB decision is part of the close cooperation process between the ECB and the BNB according to the ECB’s Decision (EU) 2020/1015 of June 24 2020.

The initial date of close cooperation between the ECB and the BNB is October 1 2020.

As of that date, by decision of the BNB governing council, Radoslav Milenkov, Deputy Governor in charge of the Banking Supervision Department, will represent BNB on the ECB Supervisory Board with the same rights and obligations as all other members, including a voting right.

For the purposes of direct supervision over the systemic banks, the BNB will designate sub-coordinators and its own representatives in the supervisory teams for the significant institutions.

The ECB will also be responsible for the oversight of the less significant institutions, which remain subject to direct supervision by the BNB, and for the common procedures for all supervised entities.

Тhe ECB’s oversight of the less significant banks will include control over the application of the common supervisory standards of the Single Supervisory Mechanism (SSM), the BNB statement said.

The ECB will have certain direct powers regarding the less significant institutions related with the authorizations, issuing recommendations, guidelines and general instructions, planning and carrying out inspections, including taking over direct supervision over the less significant institutions.

For the purposes of the oversight over the less significant banks, a structure has been set up under the ECB’s Single Supervisory Mechanism and BNB will take part in it.

Within this structure, issues of the oversight over the less significant banks will be discussed among the countries of the Single Supervisory Mechanism, the statement said.

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