Bulgaria: Financial System Stability Assessment-Press Release; Staff Report; and Statement by the Executive Director for Bulgaria
IMF Staff Country Reports, May 23, 2017
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- Bulgaria: Financial System Stability Assessment-Press Release; Staff Report; and Statement by the Executive Director for Bulgaria
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Bibliographic details
- Published: May 23, 2017
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484301524.002
Overview and purpose
- This paper assesses the stability of the financial system in Bulgaria.
- Progress has been made in Bulgaria to strengthen supervision since the 2015 Basel Core Principles assessment, but more work and resources are needed.
Key findings
- Nonperforming loans (NPLs) in Bulgaria’s banks stood at 13.7 percent of total loans as of June 2016.
- European Union–weighted average NPLs were 5.5 percent.
- Certain accounting, collateral valuation, and risk management practices have discouraged NPL reduction.
Risks and vulnerabilities
- High stock of NPLs relative to the EU-weighted average presents a significant stability concern.
- Weaknesses in accounting, collateral valuation, and risk management increase the difficulty of reducing NPLs and could impair banks’ balance sheets.
Policy implications and recommendations
- A more targeted strategy is needed to address high NPLs.
- Banks will need to build provisions in preparation for the implementation of the forthcoming expected credit loss provisioning standards beginning in 2018.
- Continued strengthening of supervisory capacity and allocation of additional resources is required following the 2015 Basel Core Principles assessment.
Publication metadata (select highlights from the page)
- Publication date on landing page: May 23, 2017
- Pages: 50
- Series: Country Report No. 2017/132
- Issue: 132
- DOI: https://doi.org/10.5089/9781484301524.002
- ISBN: 9781484301524
- ISSN: 1934-7685
Source: Bulgaria: Financial System Stability Assessment-Press Release; Staff Report; and Statement by the Executive Director for Bulgaria (May 23, 2017).
Content in this bundle
- Country Report