European Commission: BNB Committed Gaffe with FIB and Investbank Data

There is possibility of market manipulation. Bivol will approach the Financial Supervision Commission (FSC)

The European Commission revealed that the Bulgarian central bank (Bulgarian National Bank, BNB) has published a false report about the state of the banking system during the first quarter of 2015

The published data did not contain information on interest paid by FIB and Investbank to the State for the State money deposited in these banks. For other banks, however, there was such data.

Bivol turned to the European Commission with a signal that there are doubts about the latest State aid for banks which, however, is not public. The answer, signed by the Deputy Head of Unit responsible for State aid in the Main Directorate “Competitiveness”, can be seen here: LEMC-SA.42089 (2015-N) _EN.

The Commission’s probe, prompted by our signal, has found no evidence of unauthorized State aid. The introduction is a rehashed story about the authorized by the EC State aid for FIB, which was approved despite evidence of criminal draining of the Bank by its owners.

Clerical error?

In the second part of the letter, which is a substantive reply to the signal of Bivol, it is claimed that FIB and Investbank have paid interest on the State aid received.

The most interesting is the recognition that the information has not been registered correctly in the BNB report of March 2015 (more precisely in Microprudential form 1) due to “clerical error” because of the new forms. This “error” has been corrected in the report of May 2015.

It’s not entirely clear why the “error” concerns precisely those banks declared in 2006 by former US Ambassador Beyrle to be “bad apples” that are giving away the money of the depositors to connected parties, linked to the financing of organized crime. The failed Corporate Commercial Bank (CCB) was also such a bank, however, there was no mercy for it on the part of BNB and the Prosecution.

In essence, however, the publishing of false official data on the status of a public company, moreover a bank “bad apple” such as FIB, which is the subject of a State aid scheme, can lead to market manipulation. It is appropriate to clarify whether the banks have submitted false data, or the error was committed by BNB which summarized and published them. Bivol will approach FSC which by law is required to monitor and regulate such processes.

The FSC, led by Stoyan Mavrodiev, completely missed the CCB case, but is particularly closely monitoring information in the media exposing abuses in the banking system. The Commission imposes record fines for the publication of fully credible evidence or even for simply reporting that there are lines of customers in front of bank branches, as is the case with the Vratsa edition Zov News (Call News). A fine was also imposed on the publisher of Capital and Dnevnik (Diary) and the journalists were honored with a separate fine because they refused to disclose their source. There are FSC proceedings against Bivol as well and we have no information on them being terminated.



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