Why do banks in Bulgaria go bankrupt? The Strasbourg Court ruling and the lessons unlearned

Nikolay Staykov:

The KTB Bank’s story has shown that even if serious investigations of bank abuses with regulatory protection appear in the public sphere, the Bulgarian National Bank cannot provide an independent internal investigation.

Абонирайте се за бюлетина на АКФ, за да научавате за най-новите ни разследвания и анализи:

С натискане на бутона потвърждавате, че сте запознати с Политиката ни за поверителност

The hearings in the KTB case showed that they were assigned to the same directorate whose head turned out to be a defendant.
The second problem – the BNB will not, cannot, or will not enforce measures in the event of a direct malicious attack on a bank.

The third problem is the easy “disappearance” of credit files worth billions. The lack of credit information, evidenced by the disputed reports on the KTB, clearly showed that this provided opportunities for deliberate concealment and manipulation of subsequent audits.

On the part of the investigating authorities, there are even more problems; first among them is the investigation’s objectivity. A second problem is the Prosecutor’s Office’s lack of financial expertise, acknowledged by the supervising prosecutor in the KTB mega case, Ivan Geshev himself. Today, he is already Prosecutor General.

This necessitates external expertise, for which the Prosecutor’s Office has requested money from the government, which is a serious procedural problem.

The prime minister at the time, Boyko Borissov, for example, is also a potential witness in the case.

Despite his series of meetings with the banker Tsvetan Vassilev, his interrogation was deemed unnecessary at the discretion of the supervising prosecutor, i.e., the one asking the government for money.

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