News

In compliance with Art. 12, para. 1, item 6 of the Law on Bank Deposit Guarantee the Governing Council of the Bulgarian National Bank at its meeting on 15 May 2012 approved the Report on the implementation of BDIF administrative expenses budget for 2011 presented by BDIF Management Board. According to the report BDIF has achieved the targets set for 2011, establishing itself as a guarantor of depositors funds in banks. BDIF administrative expenses budget for 2011 amounted to BGN 1,624,400, whereas its performance as at 31 December 2011 stood at BGN 1,395,554, which is a saving of 14%.

A technical seminar on “Key Legal Modalities for Assisting Cooperation among DGSs in Europe”, organized by the Europe Regional Committee (ERC) of the International Association of Deposits Insurers (IADI), was hosted by BDIF in Sofia from 19 to 21 April 2012. Main panels in the program included: lending/borrowing and mutual claims handling agreements among DGSs, insolvency regimes in different countries, backup funding agreement with the state/central banks, selected legal issues of resolution framework. Forum attendees were over 40: representatives of deposit guarantee schemes, representatives of the Bulgarian National Bank and the Ministry of Finance, and leading Bulgarian lawyers in international law.

All banks transferred duly the annual premium contributions payable to the Bulgarian Deposit Insurance Fund (BDIF). 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 not a business day (Saturday), the deadline for transferring annual premiums was extended to 2 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, I?BANK GmbH – Sofia Branch and Regional Investment Bank – Bulgaria Branch do not participate in the Bulgarian deposit insurance system and respectively do not pay premium contributions to the BDIF. ‘After the transfer of annual premiums for 2012 amounting to BGN 218.6 million, BDIF funds total BGN 1554.3 million’ announced Mr. Rossen Nikolov, Chairman of BDIF Management Board. BDIF accumulated funds shall be primarily used for repayment of the insured deposit amounts of physical persons and legal entities in the event of a bank failure. Currently the level of coverage is BGN 196,000 per depositor per bank. Insured are deposits 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.

From 16 to 20 January 2012 BDIF representatives, within the established bilateral cooperation, were on a study visit to the Savings Deposit Insurance Fund of Turkey in Istanbul to study their experience in the following areas: risk-based deposit insurance: risk monitoring applications and premium system, bank resolution experience and asset management and disposition.

Today, 20 December 2011, at its meeting, the Governing Council of the Bulgarian National Bank approved the Annual budget for administrative expenses of the Bulgarian Deposit Insurance Fund for 2012, presented by BDIF Management Board. The budget amounts to BGN 1,715,022.

Representatives of the Deposit Insurance Agency of Serbia paid a working visit at BDIF invitation on 23 and 24 November 2011 within the established bilateral cooperation. Topics discussed in view of expected expanded powers and review of DGS included: alternative methods for bank resolution, payout procedure, bankruptcy procedures, risk assessment, application of Core Principles for Effective Deposit Insurance Systems and current issues. Meetings were held in the office of the Association of Banks in Bulgaria. Representatives of DIA Serbia also held a meeting with the Investor Compensation Fund.  

On 20 October 2011 BDIF and the Deposit Guarantee Fund of Ukraine signed a Memorandum of Understanding in Warsaw during the Tenth Annual Conference and Annual General Meeting of the International Association of Deposit Insurers, held from 17 to 21 October. The Memorandum of Understanding formalizes the framework of cooperation and exchange of information between the two institutions. The document provides for cooperation between the signatories in the field of deposit insurance and resolution of ailing banks, thereby contributing to the stability of the respective banking systems. The parties agreed to exchange information and experience, including visits of officials. The term of the Memorandum is five years with the option for extension.

BDIF Chairman, Mr. Rosen Nikolov, was elected a member of the Executive Council of the International Association of Deposit Insurers (IADI) with a three-year term of office. Elections took place during the Tenth Annual Conference and the Annual General Meeting of IADI. The Deposit Guarantee Fund of Poland hosted the meetings held from 17 to 21 October inWarsaw. The theme of this year’s conference was "Beyond the crisis: the need to strengthen financial stability framework." Participants discussed the impact of the global economic situation and national financial safety nets. Discussed were, accordingly, options to assist problematic banks within crisis management framework and approaches to deal with systematically important financial institutions (too big to fail). The second conference day was devoted to the role of deposit-guarantee schemes in the financial safety nets and for financial inclusion. At the forum BDIF and Deposit Guarantee Fund of Ukraine signed a Memorandum of Understanding, which formalizes the framework for cooperation and information exchange between the two institutions.

BDIF Chairman Rossen Nikolov and experts met with representatives of the Deposit Insurance Fund, Czech Republic, who paid a working visit to BDIF in Sofia on 12 to 14 September 2011. Discussion topics included: DGS funding arrangements, borrowing possibilities, investment management, payout procedure and stress testing.