Bulgarian coalition row stalls appointment of banking supervisor
By Angel Krasimirov and Tsvetelia Tsolova
SOFIA (Reuters) - A row within Bulgaria's ruling coalition has stalled the central bank's appointment of a deputy governor to take charge of banking supervision, which in turn could delay the country's bid to join the EU's banking union.
Central Bank Governor Ivan Iskrov nominated Dimitar Kostov last month to take over the banking supervision department, whose previous head Tsvetan Gounev was dismissed after a banking crisis that culminated in Corpbank's collapse in December.
Prime Minister Boiko Borisov said on Thursday his GERB party would reluctantly withdraw its support for Kostov after right-wing junior coalition partner the Reformist Bloc decided not to back his nomination.
A central bank spokesman declined to comment on whether the governor would make a fresh nomination.
The Reformist Bloc said Kostov, who is currently a deputy governor heading another department, shared responsibility as a member of the central bank's board for the collapse of Corporate Commercial Bank (Corpbank) <6C9.BB> after a bank run in June.
Bulgaria has said it wants to join the EU's banking union quickly to restore trust in the banking system following the Corpbank crisis, which raised concerns about the central bank's supervision of lenders, and aspires eventually to join the euro.
Georgi Angelov, an economist with Sofia's Open Society Institute, said the delay in appointing a deputy governor "will certainly slow Bulgaria's plans to join the EU's banking union and carry out an asset quality review of its banks".
The Reformist Bloc has also questioned Kostov's performance as finance minister during a previous financial crisis in 1996-97 during which one-third of the country's banks went bust.
Borisov accused his coalition partners of populism and warned of the risks leaving the role vacant.
"Our partners know perfectly well that only the governor can nominate his deputies ... If we do not accept his nomination now, no-one can force Iskrov to make another nomination," Borisov was quoted as saying in a GERB party statement.
He said "the big evil" would be leaving banks without a supervisor until a new central bank governor and deputy governor are chosen in August or September, warning "there will be no-one guilty if something happens".
(Editing by Matthias Williams and Catherine Evans)
