Bulgaria’s financial system and the central bank's balance sheet were in very good condition and there was no reason to worry about their health, Bulgarian National Bank (BNB) governor Ivan Iskrov has said.

At a presentation of the events planned for BNB’s 130th anniversary, Iskrov said that many countries could only dream of the current state of the Bulgarian financial system.

At the current stage, there was no reason to take more regulatory action, deputy central bank governor Dimitar Kostov said. Other European Union member states were tightening banking rules, but Bulgaria did not need to follow suit as it had already done that, including in terms of the capital requirement, according to Kostov.

The EU’s total capital adequacy requirement is set at eight per cent. In Bulgaria the requirement is 12 per cent, but at the end of 2008, the capital adequacy ratio of the Bulgarian banking system was 14.86 per cent.

Stringent policies and provisions worth about two to three billion leva provided Bulgarian banks with a comfortable buffer, Kostov said. The central bank has extended the regulatory period after which banks had to increase provisions on bad loans, which would enable lenders to be even more flexible with their capital, he said.

The stable financial system and the BNB’s tight supervisory standards have mitigated the impact of the global financial and economic crisis, Iskrov said. He reiterated his earlier calls for the media to take the gloomy forecasts of foreign institutions and analysts with a pinch of salt, saying they were not familiar with the peculiarities of the Bulgarian market.

Source: Dnevnik