{
  "title": "Bulgaria: Technical Assistance Report-Bank Supervision",
  "publication": "IMF Staff Country Reports, May 21, 2019",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2019/05/21/bulgaria-technical-assistance-report-bank-supervision-46919",
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  "summary": "This Technical Assistance report on Bulgaria reviews the formalization and implementation of a comprehensive Supervisory and Review and Evaluation Process (SREP) that includes an explicit and detailed supervisory Pillar 2 capital requirement.",
  "sections": [
    {
      "heading": "SREP formalization and Pillar 2 capital requirement",
      "content": "- Reviews the formalization and implementation of a comprehensive Supervisory and Review and Evaluation Process (SREP) that includes an explicit and detailed supervisory Pillar 2 capital requirement.\n- Banking Supervision Department has developed a methodology for the combined risk assessment and subsequent definition of an additional capital requirement for credit risk.\n- Emphasizes that unsound banking practices or regulatory breaches cannot be compensated by complementary capital charges.\n- States that loan loss provisions and capital charges for loans created as a result of such practices cannot be created and judged on the basis of the common standards."
    },
    {
      "heading": "Stress testing and top-down inputs",
      "content": "- Individual outcomes of the top-down stress tests carried out by the Macroprudential Supervision and Financial Stability Directorate can make a valuable contribution to the SREP.\n- Top-down stress test outputs allow assessment of:\n  - The quality of internal control in the institution.\n  - The institution’s capacity to timely produce complete and reliable data."
    },
    {
      "heading": "Bank soundness, capital positions, and nonperforming loans",
      "content": "- Notes that capital positions globally are adequate.\n- Notes that soundness indicators have improved, partly as a result of the 2016 Asset Quality Review.\n- Highlights that nonperforming loans remain high in Bulgaria, with notable differences between the banks."
    },
    {
      "heading": "Subjects and keywords (as presented)",
      "content": "- Subjects: Banking, Credit risk, External balance assessment (EBA), External position, Financial institutions, Financial regulation and supervision, Financial sector policy and analysis, Internal controls, Nonperforming loans, Revenue administration, Stress testing\n- Keywords: BNB regulation, capital requirement, CR, Credit risk, draft SREP manual, External balance assessment (EBA), Global, Internal controls, ISCR, Nonperforming loans, SREP approach, SREP assessment, SREP cycle, SREP element, SREP manual, SREP outcome, SREP process, Stress testing\n\n---\n\n Content in this bundle\n\n- Bulgaria: Technical Assistance Report-Bank Supervision; IMF Country Report No. 19/142; February 2019\n  - Bulgaria: Technical Assistance Report-Bank Supervision; IMF Country Report No. 19/142; February 2019 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Bulgaria: Technical Assistance Report-Bank Supervision; IMF Country Report No. 19/142; February 2019 (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: May 21, 2019",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9781498316439.002",
    "Reviews the formalization and implementation of a comprehensive Supervisory and Review and Evaluation Process (SREP) that includes an explicit and detailed supervisory Pillar 2 capital requirement.",
    "Emphasizes that unsound banking practices or regulatory breaches cannot be compensated by complementary capital charges.",
    "States that loan loss provisions and capital charges for loans created as a result of such practices cannot be created and judged on the basis of the common standards.",
    "Individual outcomes of the top-down stress tests carried out by the Macroprudential Supervision and Financial Stability Directorate can make a valuable contribution to the SREP.",
    "Top-down stress test outputs allow assessment of:",
    "Notes that capital positions globally are adequate.",
    "Notes that soundness indicators have improved, partly as a result of the 2016 Asset Quality Review.",
    "Highlights that nonperforming loans remain high in Bulgaria, with notable differences between the banks.",
    "Subjects: Banking, Credit risk, External balance assessment (EBA), External position, Financial institutions, Financial regulation and supervision, Financial sector policy and analysis, Internal controls, Nonperforming loans, Revenue administration, Stress testing",
    "Keywords: BNB regulation, capital requirement, CR, Credit risk, draft SREP manual, External balance assessment (EBA), Global, Internal controls, ISCR, Nonperforming loans, SREP approach, SREP assessment, SREP cycle, SREP element, SREP manual, SREP outcome, SREP process, Stress testing",
    "**Bulgaria: Technical Assistance Report-Bank Supervision; IMF Country Report No. 19/142; February 2019**"
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