Bulgarian bank system destabilized by run on deposits, Central Bank says

UPI International Top News |

The Bulgarian central bank announced what it terms a systematic attempt to destabilize the country's banking system.

A run on deposits at Bulgaria's fourth-largest bank, Corporate Commercial Bank -- in which depositors withdraw their money at once -- occurred after the bank was taken over by the central bank, in what the central bank called isolated internal problems. Foreign banks with Bulgarian subsidiaries claim their affiliates do not suffer similar problems.



There is speculation, though the run on deposits at Corporate Commercial Bank could spread to other banks, and the value of shares in Bulgaria's First Investment Bank fell 23 percent Friday. The value of other bank investments fell as well. In addition, customers of First Investment Bank could be seen lining up to withdraw funds Friday at the bank's headquarters in Sofia.

First Investment Bank withdrew 800 million lev ($558.1 million) in a matter of hours Monday, the bank said.

The central bank said in a statement:

"In recent days there has been an attempt to destabilize the state through an organized attack against Bulgarian banks without any reason."

It also mentioned "untrue and ill-intentioned rumors" regarding the durability of the Bulgarian banking system.

"The whole banking sector is being sold off due to the problems around Corporate Bank. Investors are worried the problems can spread," said Boyan Gatsev of Varchev Finance.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
TGIOY Tung Ho Steel Enterp 144A n/a n/a n/a 0

Comments

Emerging Growth

Valuesetters Inc

Valuesetters Inc is a next generation technology company. The Company is focused in providing technologies and infrastructure-as-a-service (Iaas) to consumer through enterprise communications, entertainment, and game platforms.

Private Markets

Voleo

Voleo is a free download that allows you to form investment clubs with your friends, family, colleagues, classmates, teammates…basically anyone you know and trust. Invest and manage a stock portfolio…

iPRO Network, LLC

We provide the platform, tools, and resources to empower individuals and professionals to market desirable goods and services to the public, taking the place of traditional methods of commerce.