BNB governor Ivan Iskrov, left, and Finance Minister Simeon Dyankov Photo: Tsvetelina Angelova
Bulgarian National Bank (BNB) governor Ivan Iskrov has criticised the new rules concerning the management of the Silver Fund, passed by Cabinet on April 11, saying that the changes increased the risk to Bulgaria's financial stability and the Silver Fund itself.
The Silver Fund, created to shore up the state pension system at a point in future, is part of the country's fiscal reserve, which underpins Bulgaria's currency board agreement, upholding which is the main mandate of the BNB.
Initially scheduled to be used for pension payments starting 2020, the new regulations pushed back the starting date of Silver Fund payouts to 2028. But the main thrust of the changes, and the ones that BNB opposed most vocally, was that the Cabinet would be allowed to use Silver Fund money to buy Government debt.
Previously, the Fund was allowed to invest in foreign bonds, but the option was never exercised. Instead, the money has been kept in low-interest short-term deposits with the BNB, which has resulted in zero, or even negative yield in most years.
The Cabinet would be allowed to use up to 30 per cent of the Silver Fund to buy its own bonds this year; the ceiling would increase by 10 percentage points each year before peaking at 70 per cent in 2016, according to the amendments approved by the Government.
The Fund, currently at about 1.8 billion leva, is expected to see its endowment increase to two billion leva by the end of the year by incorporating privatisation and concession revenue. This means that the Cabinet could have as much as 600 million leva of the Fund's money to purchase its own securities.
BNB's decision to make a vocal stand was unexpected, given that the central bank rarely takes a public stance on issues of Government policy, but it was the second time this month that Iskrov came out criticising a Finance Ministry initiative, having last week warned the Government to curtail its efforts to strenghten administrative regulation of the banking sector (a move that the Finance Ministry says will increase transparency about how interest rates are fixed, which has been a long-standing gripe that customers have had with banks over the years).
The main argument used by BNB to justify its outspoken position was that the new regulation increased the risk to Bulgaria's financial stability. The Silver Fund is part of Bulgaria's foreign currency reserves and using part of the money to buy domestic securities would automatically decrease the size of forex reserves, a criterion that investors have long used to gauge the strength of the currency board, BNB said.
Answering BNB criticism, Finance Minister Simeon Dyankov said on April 12 that the central bank's reaction was a natural one. "If I were the [BNB] governor, I would have written the same letter," he told Bulgarian National Television.
The difference was that BNB was protecting the Silver Fund as it was envisioned, a passive asset, while the Finance Ministry wanted to make the asset profitable, Dyankov said.
The narrow focus of many euro zone countries on fiscal austerity is deepening the jobs crisis and could even lead to another recession in Europe, said the Director of the ILO Institute for International Labour Studies and lead author of the report, Raymond Torres.
Yassen Lyubenov is the new head of marketing at Bulgarian beer brewer Kamenitza. Lyubenov has 12 years of experience in marketing in the fast-moving consumer goods sector and has started his career as assistant brand manager at Kraft Foods Bulgaria. He later became brand manager at Wrigley Bulgaria, with responsibilities for Bulgaria and Macedonia. Prior to joining Kamenitza, he was senior marketing manager at Wrigley Russia, where he was in charge of brand expansion into Ukraine, Belarus, Central Asia and the Caucasus.
Lyubenov has a bachelor's degree in international business administration from the University of Lincoln, UK.
Kamelia Lozanova has been appointed the executive director of the Employment Agency, a position she has held ad interim since September 2011, following the resignation of her predecessor Rossitsa Stelianova. Prior to that, Lozanova was the agency's deputy executive director in charge of international projects and European programmes. She has been with the agency for more than 20 years.
Lozanova has a degree in Slavonic philology from the St Kliment Ohridski University of Sofia.
Gloria Dimitrova has been appointed executive director and member of the managing board at Uniqa Life Insurance Bulgaria. Dimitrova began her career in 1998 at the insurance supervision directorate, but moved to the private sector and worked for professional services and insurance brokerage firm Marsh&McLennan and US insurer AIG, both in Bulgaria and the Middle East. She joined Uniqa as regional director for Sofia in 2010.
Dimitrova has a degree in economics from the University for National and World Economy in Sofia and a master's degree in insurance from the Business Academy in Svishtov.
Bedros Kalfayan, general manager of skin care and cosmetics company Beiersdorf Bulgaria, will oversee the parent's company units in Romania and Moldova starting April 1. Following company restructuring, Beiersdorf's subsidiaries in the three countries were merged and are now one unit, part of Beiersdorf Central and Eastern Europe. Kalfayan joined Beiersdorf in 2007 as sales manager and was promoted to general manager in 2008. Prior to that, he worked for Axxon Bulgaria, Ferrero and Rubella.
Kalfayan has a master's degree in industrial management from the Technical University in Sofia.
Sasha Bezuhanova has been appointed Hewlett-Packard public sector director for emerging markets, where she will oversee HP public sector activities in 63 countries, including Bulgaria. Bezuhanova will also be in charge of HP's relations with the European Union. Bezuhanova has been HP's public sector director for Central and Eastern Europe since 2008; before that she was general manager of HP Bulgaria since 1998.
Bezuhanova has a master's degree in electronics from the Technical University in Sofia and has completed a managment programme at INSEAD.
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