Restructuring and Privatisation of the Bulgarian Banking Sector
Acta Oeconomica, 50(3/4), 371-384, 1999
Posted: 30 Jan 2020
Date Written: August 7, 1999
This article is a brief review of developments in the banking sector in Bulgaria as well as an analysis of the political and macroeconomic factors that have influenced this process. It begins with a historical overview of the different stages in the evolution of the Bulgarian financial sector. Greatest attention is placed on banking sector reforms after the abandonment of the 'monobank' system. In particular, the bank consolidation process, the 'bad debt' problem, and the 1996 banking crisis that occurred during the transition period are discussed in detail. These developments are properly linked to the relevant macroeconomic factors and legal framework as well. Furthermore, the recently achieved stability in the banking sector is justly ascribed to the introduction of the currency board in 1997. The stabilizing effects of the currency board are highlighted. Finally, a brief overview is included of both the political and economic stabilization in Bulgaria up until the end of 1999 and it provides the necessary background for understanding the achieved progress in bank privatization over the last two years. In fact, at the end of 1999 approximately half of the total bank assets were in private hands.
Keywords: Banking, Regulation, Policy, Restructuring, Eastern Europe
JEL Classification: G18, G21, G28, K21
Suggested Citation: Suggested Citation