What on earth is going on in Bulgaria?

At Forbes:

Things move quickly in Bulgaria. Less than a month ago, the IMF gave Bulgaria's banking system a clean bill of health, saying it was "stable and liquid, with banks' non-performing loans buffered by provisions and significant capital, as well as a positive net foreign asset position". But yesterday, the President of Bulgaria was forced to issue a statement reassuring people that their money was safe after a week of bank runs. And the EU has now granted Bulgaria an emergency line of credit to support its banking system.

So what on earth went wrong? Find out here.

Comments

  1. Euro peg seems to be the core problem. “Market” knows that Bulgarian CB cannot guarantee unlimited liquidity to the banks in case of reserve drain ( cash pulled out of ATMs in a rampant pace for example). I can see a massive deflationary potential resulting from austerized government spending which in turn is/will be a consequence of being committed to pay for bad assets of taken over banks. Looks like a classic example of the oligarchs handing the bags to the little people and this brings us back to the CORRUPTION phenomenon :)

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