Saturday, 5 July 2014

Trust the wisdom of the International Monetary Fund? Be it at your own risk

Another example of the true meaning when the board announces it has full confidence in the coach!

IMF Concludes Staff Visit to Bulgaria

Press Release No. 14/278
June 12, 2014
An International Monetary Fund (IMF) mission visited Sofia during June 6–11, 2014, to discuss the economic outlook and government policies with the Bulgarian authorities. At the conclusion of this regular staff visit, Ms. Michele Shannon, IMF Mission Chief for Bulgaria, made the following statement: …
Regarding the financial sector, the implementation of the new EU regulatory regime is on track, including through the adoption of maximum capital conservation and systemic risk buffers applicable to all banks. In addition, the elimination of specific provisions resulted in a commensurate increase in regulatory capital. While credit growth remains low, the system is stable and liquid, with banks’ non-performing loans buffered by provisions and significant capital, as well as a positive net foreign asset position. Efforts by banks to address the stock of distressed assets and claim associated collateral should continue in order to lower asset price uncertainty and thereby support renewed investment.
(Note: emphasis added by the Owl.)

Accusations fly in Bulgaria’s murky bank run

SOFIA Fri Jul 4, 2014 5:50am EDT
(Reuters) – One worker at Bulgaria’s Corporate Commercial Bank knew panic was setting in when she spotted colleagues among the anxious depositors lined up to withdraw cash from the troubled bank.
The alarm came in part because the week before, on June 13, with television news crews filming, Bulgarian state prosecutors had raided a building in Sofia that housed Corpbank offices.
Though both the prosecutors and the bank said the raid did not target Corpbank – the building housed other companies as well – customers soon began to withdraw their savings. Within days, the Central Bank had seized control of the bank, the fourth-biggest lender in Bulgaria, and suspended its operations for three months.
Though both the prosecutors and the bank said the raid did not target Corpbank – the building housed other companies as well – customers soon began to withdraw their savings. Within days, the Central Bank had seized control of the bank, the fourth-biggest lender in Bulgaria, and suspended its operations for three months.
The dramatic raid and bank run were reminders that despite progress from the worst days of the euro crisis, parts of Europe’s financial system are still far from secure. The run quickly spread to another bank and saw Sofia announce a protective $2.3 billion credit line.
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