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UPDATE 2-Bulgaria's new cbank head to boost trust, monitor Greece
July 14, 2015 / 11:44 AM / 2 years ago

UPDATE 2-Bulgaria's new cbank head to boost trust, monitor Greece

* Radev replaces Iskrov as of July 15, plans

* Lists reform of banking supervision as top priority

* Says to monitor carefully situation in Greece

* To seek new mandates for two current cbank deputy governors (Adds details on nominating deputy central bank governors)

By Tsvetelia Tsolova

SOFIA, July 14 (Reuters) - Bulgaria appointed a new central bank governor on Tuesday, hoping to boost confidence after the collapse of Corporate Commercial Bank (Corpbank) and shield lenders from a debt crisis in Greece.

Dimitar Radev, 59, a senior economist at the International Monetary Fund, succeeds Ivan Iskrov, who resigned a year after the fall of Corpbank triggered Bulgaria’s worst financial crisis since the 1990s. He will take office on Wednesday.

“We should not allow a repeat of what happened with Corporate Commercial Bank,” Radev told parliament. “I have three main measures - reform of banking supervision, introduction of a mechanism for solving problems in the banking sector and a review of the financial situation of our banks.”

A parliamentary report said Corpbank was run like a pyramid scheme by its main shareholder while the intelligence services and central bank regulators were “asleep”.

Radev said one of his first tasks will be to monitor and react to developments in neighbouring Greece to protect Bulgarian banks from possible spillover from the Greek financial crisis.

Greek-owned lenders control more than a fifth of Bulgarian banking assets, making the country vulnerable to any fallout from Athens. The central bank has said there is no direct risk for them since they have not bought Greek government bonds or lent to their parent units in Greece.

In an interview with Reuters, Radev said these lenders were highly capitalised and liquid and risks were well contained for now, but he was ready to react as needed.

Local economists and analysts welcome the appointment of Radev, who served as deputy finance minister in six consecutive governments in the 1990s and has worked for the IMF for the past 14 years.

“He is a very good specialist. For such a post it is important to have an integrity, and he certainly has,” said Krassen Stanchev, a founder of the independent Institute for Market Economics.

Radev told journalists he will keep current deputy governors Dimitar Kostov and Kalin Hristov and make the bank’s chief legal advisor Nina Stoyanova a deputy governor in charge of banking supervision.

The Association of Commercial Banks has asked for the swift appointment of a banking deputy to help lenders prepare for pending asset quality reviews and stress tests next year.

The central bank has operated for almost a year without a banking supervision head. After being changed with abuse of office linked to Corpbank last year, Tsevtan Gounev first took paid leave and was later dismissed by parliament. (Additional reporting by Angel Krasimirov, Editing by Radu Marinas and Tom Heneghan)

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