Monday, 30 June 2014

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.

1 comment:

  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 :)