Ivan Iskrov To Govern BNB Another 6 Years

: Ivan Iskrov To Govern BNB Another 6 Years
: ctualno.com BNB Governor Ivan Iskrov is sure to be re-elected for the position.

Critics of the Central bank governor accuse the ruling of protecting the banking system lobby in NMSP and ask what has the ex-kings party sacrificed and at what price it has convinced BSP to agree to Iskrov keeping the helm of the state bank

Elena Markova | 27.05.2009 21:27

Current Governor of the Bulgarian National Bank Ivan Iskrov is the firm candidate of the tripartite coalition to be re-elected for another 6-year term in office. On Tuesday, May 26, his application was formally filed with the administration of the Parliament on behalf of the three parties in the ruling coalition the Bulgarian Socialist Party (BSP), the ethnically Turkish Movement for Rights and Freedoms, and the centre-right National Movement for Stability and Prosperity (NMSP). The decree is expected to be voted in plenary hall Thursday the last day of actual work of this National Assembly, and to be supported by not only the majority, but by some MPS from the opposition, too.

Iskrov’s term in office expires October 9, and under the Law on the Bulgarian National Bank the selection of a new governor should be voted not more than three and not less than two months prior to the current incumbent’s mandate expiry. Which means, that the now head of the central bank may not be re-elected before July 9. But then the current Parliament will no longer be functioning. The ruling majority argues that the time lines in the law were recommendatory, not mandatory. In case lawyers explicitly point out the election might not take place, Iskrov would submit resignation and then get immediately re-elected, NMSP MPs explained the reserve plan.

Yet according to lawyers Bulgaria News contacted,
for BNB’s governor election to be legal, it should get re-confirmed through voting by the next parliament.
But the now ruling will probably not have certain majority in it.

The legal loophole in this case was for Iskrov’s election to get approved by the EU regulators and coordinated with the International Monetary Fund (IMF).

“I do trust legislators in the Parliament and I believe they would not pose under question the conformity with the law of BNB Governor’s election”, BSP MP Petar Kanev told Bulgaria News. In his capacity of deputy chair of the Economy Committee and member of the Finance Committee with the Parliament, Kanev assessed as good the work of Ivan Iskrov as governor of the Central bank so far. He has managed to carry the system through the stormy waters of financial crisis far more successful than counterparts of his in other countries, Kanev said. To him, the re-election of the current governor would be received as a
sign of security in the conditions of crisis and would signal that the system is stable and the state would keep following the policy of supporting the currency board and the way to adopting the Euro.

There is no way for the Bulgarian Central bank governor to be elected without the support of the relevant European institutions, the BSP MP emphasized, elaborating the proposal has been coordinated with the European Central Bank.

Ivan Iskrov was elected governor of BNB as a candidate of the NMSP at end-2003. Then coalition partner MRF was not in raptures over the fact there was only one candidature and was close to refusing its support.

“NMSP deferred on practically everything in order of keeping its candidature for NMN head, and I’m asking myself what dictated this probably a huge resource is raffled somewhere”, Executive of D Bank Stoyan Alexandrov commented for Bulgaria News. Elaborating he had nothing in person against Iskrov, Alexandrov pointed out he was principally opposing political assignments for such positions, for which more suitable experts existed.

Before it became clear the ruling majority would unite around the idea of re-electing the current BNB governor, some circles close to the BSP discussed for the post the names of Parliamentary Speaker Georgi Pirinski and Minister of Finance Plamen Oresharski. But those two are to top the election tickets of the BSP for the general election in the towns of, correspondingly, Pazardzhik and Bourgas.

DSB’s economy expert Dimitar Bachvarov also considers
Ivan Iskrov’s candidature not that remarkable,
especially on the background of the economy crisis and his up to now decisions and attitudes on serious problems. To Bachvarov, it was namely BNB’s governor who was supposed to warn in time the ruling coalition about the hazards Bulgaria’s economy would face, and react for interest rates cut and creating conditions for the elimination of the effects of the global crisis Bulgaria’s businesses already suffer from.

DSB’s economist pointed out that apart from BNB governor’s explanations that the banking system was stable, he has not heard from him any clearer and more responsible position over interest rates cuts, nor have more explicit measures been taken for reacting to the outer processes hitting the country. (With the election of Iskrov to head the Central bank and the following resignation of Martin Zaimov as deputy governor from the UDF, and later on from DSB, rightist politicians lost their influence in BNB.)

The election of the face of the Central bank is a key issue not only because of the expectation that the effects of the world financial crisis are yet to hit Bulgaria, or the possible reactions to it via using money from the fiscal reserve, financiers explained. Experts reminded about the management of money from the state treasury through debt swaps under the Saxe-Coburg-Gotha cabinet with Minister of Finance Milen Velchev. As BNB Governor Ivan Iskrov was rather championing conservative management but the role of the central bank and all decisions on what bank regulations should look like from now on are key for keeping the stability.

In this regard economists consider following the current policy a better option in order of not posing to doubt the currency board active in Bulgaria.

The NMSP connection
It’s not much of a secret that bankers’ lobby in NMSP comes from the group of assassinated late 2005 banker Emil Kyulev. Iskrov himself is not hiding the fact he was proposed with the support of NMSP, and before taking this office he was one of the executive directors of Roseximbank. He landed there after being promoted in 1997 from a clerk in BNB’s Bank Control Dept. to deputy chair of DSK Bank. Within BNB itself he is also not perceived single-minded due to his close relations to former Interior Minister Roumen Petkov.

One of the battles Iskrov fought was his firm stance in defence of Bulgaria’s bank system stability and his severe opposition to all attempts for “placing borrowers’ rights before creditors’”. In the recent years all attempts for passing amendments to the laws connected to cancelling penalty interests for early acquittal, for reducing interest rates, or guaranteeing credit receivers’ interests (most often proposed by independent MPs Mincho Spassov and Stela Bankova) met the severe opposition of BNB. To this reason some of Iskrov’s critics accused him of working in favour of the banking lobby, instead of for consumers’ interests.

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