Bank run

During the global financial crisis of 2007-9, the US government and the Federal Reserve subjected US banks to a stress test. The idea was to test banks in severe - but hypothetical - recession scenarios in which they would have to show they were adequately capitalized, thereby restoring the confidence of depositors and investors.

Developments over the past week have felt eerily familiar for those of us who followed the global financial crisis in 2008. Analysts argued in early 2008 that Bear Stearns' problems were a result of poor management and a failure to hedge risk. The spread of instability to a European bank (Commerzbank) was considered to be limited. Sound familiar?

In a move that sent global banking shares into turmoil, US regulators on Friday shut down Silicon Valley Bank, as markets fretted over possible contagion from the biggest banking failure since the 2008 financial crisis.

Sofia City Prosecutor's Office launched on Monday an investigation against the quaestors at the insolvent Corporate Commercial Bank (KTB) for deliberate mismanagement.

Elena Kostadinchev and Stanislav Lyutov are suspected of deliberately mismanaging KTB in the period between November 2014 and 26 March 2015, in their capacity as quaestors.

The majority shareholder in Bulgaria's collapsed Corporate Commercial Bank, or KTB, has appealed the central bank's decision to scrap KTB's banking licence, frognews.bg reported on Wednesday.

Bromak, a company owned by Tsvetan Vasilev, is KTB's majority shareholder. The appeal was filed with the Supreme Administrative Court (SAC).

Depositors in Bulgaria's troubled Corporate Commercial Bank (KTB, Corpbank) will initiate collective action against the state at the European Court of Justice in Luxembourg and the Court of Human Rights in Strasbourg.

Caretaker Finance Minister Rumen Porozhanov has said that depositors may get partial access to their funds at Bulgaria's troubled Corporate Commercial Bank (KTB, Corpbank) in September.

Guaranteed deposits in Bulgaria’s troubled Corporate Commercial Bank (KTB) will most likely be repaid under the next elected government, a leading Bulgarian economist has said.

Moody's Investors Service said it has downgraded the long-term local- and foreign-currency deposit ratings of Bulgaria’s troubled Corporate Commercial Bank (Corpbank).

The article is from EUObserver

Bulgaria, already grappling with a severe political crisis, is now trying to deal with what the government has called an organised attempt to destabilise its financial system.