News

On 14 May 2013 Mr. Toni Gogu, General Director of the Albanian Deposit Insurance Agency paid a working visit to BDIF. He had meetings with BDIF Chairman, Mr. Rossen Nikolov, and a group of experts. The following topics were discussed: DGS organizational structure, deposit insurance premium policy, investment policy and compensation procedure.

All banks transferred duly the annual premium contributions payable to the Bulgarian Deposit Insurance Fund. Under the Law on Bank Deposit Guarantee member banks shall pay annually, by 31 March in the current year, premium contributions amounting to 0.5 per cent of the eligible deposits for the preceding year, determined on an average daily basis. Insurable deposits in foreign currency are recalculated in levs at the exchange rate of the Bulgarian National Bank for the respective day. In the event of delayed payment of contribution, banks pay statutory penalty interest to the BDIF. As this year 31 March was a holiday (Sunday), the deadline for transferring annual premiums was extended to 1 April inclusive. Exempt from paying premium contributions are EU branches, and third countries bank branches on condition that their home country scheme provides equivalent level and scope of coverage. Alpha Bank — Bulgaria Branch, BNP Paribas S.A. — Sofia Branch, ING Bank N.V. — Sofia Branch and I?BANK GmbH — Sofia Branch do not participate in the Bulgarian deposit insurance system. Respectively, those branches do not pay premium contributions to the BDIF, since as per EU requirements deposit protection is provided by the home country scheme. ‘With the transfer of 2013 annual premiums from member banks, amounting to BGN 246.2 million, as of date BDIF funds total BGN 1.828 billion. This ranks BDIF among the best capitalized funds according to international standards’, said Mr. Rossen Nikolov, Chairman of BDIF Management Board. ‘BDIF works in close collaboration with other participants in the financial stability system — the Ministry of Finance and the Bulgarian National Bank, on the new regulatory framework for crisis management, as proposed by the European Commission. At a time when European institutions discuss the proposal on the recovery and resolution of credit institutions, it is prudent to consider a more effective utilization of the capacity of the deposit guarantee scheme. The high level of capitalization of BDIF is a premise that the establishment of a resolution fund for credit institutions will not lead to new regulatory burdens on the banking system and thereby increase of the cost of crediting in the economy,’ added Mr. Nikolov. BDIF accumulated funds shall be used for payout of the insured deposit amounts in the event of a bank failure. The level of coverage is BGN 196,000 per depositor per bank. Insured are deposits of physical persons and legal entities in levs and in foreign currency. By guaranteeing depositors’ funds BDIF contributes to maintaining the stability of and confidence in the banking system in Bulgaria.

BDIF Chairman Rossen Nikolov participated in a meeting of the Executive Council and the Inaugural Conference of RCNA on ‘Cross-Border Resolutions’ of the International Association of Deposit Insurers held on 5-6 February in Ottawa, Canada. At its meeting the Executive Council approved a plan for a practical response to the IMF call to IADI for expert assistance in the evaluation of DISs in different jurisdictions under the Financial Sector Assessment Program. The evaluation will be carried out according to the standards developed by the Basel Committee on Banking Supervision and the International Association of Deposit Insurers in compliance with the Core Principles for Effective Deposit Insurance Systems . Thus, IADI transforms from a standard setter to a standard evaluator, and partner of the IMF. BDIF is a founding member of the established in 2002 Association.

Today the Governing Council of the Bulgarian National Bank approved the Annual budget for administrative expenses of the Bulgarian Deposit Insurance Fund for 2013, presented by BDIF Management Board. The budget amounts to BGN 1,674,960.

BDIF Chairman, Rossen Nikolov, participated in the AGM and Annual Conference Deposit Insurers and the Financial Safety Net of the International Association of Deposit Insurers (IADI), which took place in London, 23-25 October. An Executive Council Meeting was held under the chairmanship of Martin J. Gruenberg, Acting Chairman of the Federal Deposit Insurance Corporation, where IMF-IADI cooperation under the Financial Sector Assessment Program with regard to the deposit insurers in respective jurisdictions was discussed. The events were hosted by the UK’s Financial Services Compensation Scheme.

BDIF Chairman Rosen Nikolov participated in the Annual Meeting of the European Forum of Deposit Insurers, which took place on 14 September in Geneva. A two-day international conference on ’DGS and Crisis Management’ was held concurrently.The events was hosted by esissuise (Deposit Protection of Banks and Securities Dealers).

The Bulgarian Deposit Insurance Fund (BDIF) posted its 2011 Annual Report, comprising the BDIF Management Annual Activity Report and the annual financial statements. BDIF Management Annual Activity Report gives an overview of BDIF’s operations in 2011 in the major areas of development outlined under the 2011-2014 Strategy: timely access of depositors to their guaranteed amounts, alternative methods for bank resolution, risk management, adequate funding and safe and transparent asset management, effective communication, good corporate practices and transparent and efficient governance. The budget and planning for 2012 are also accounted for. Major financial ratios, an overview on the Bulgarian banking system in 2011, the deposit guarantee in Bulgaria and a list of the BDIF member banks, investment policy and asset management, and the application of the Core Principles for Effective Deposit Insurance Systems are provided in appendices. BDIF Financial Statements are prepared in compliance with the International Financial Reporting Standards and certified by an independent auditor. BDIF 2011 Annual Report is available here .

Officials from the Deposit Insurance Board of Tanzania (DIB) commenced their one-week training attachment at BDIF on 5 June 2012. Major topics under discussion included institutional and administrative capacity, main features of a deposit insurer, failure resolution, relationships with other safety net players and financial stability issues. The training is intended to assist the DIB in their reform process aimed at making it an independent and autonomous organization from the Bank of Tanzania. The attachment was funded under the Financial Sector Assessment Program of the World Bank. 

Mr. Rossen Nikolov, Chairman of the Management Board of BDIF, delivered a presentation: ‘Financial Stability System as a Resolution Mechanism (in Bulgarian)’ before students from New Bulgarian University in Sofia today.