BANK INSOLVENCY ACT TO BE PASSED BY YEAR-END
The parliamentary group of the National Movement Simeon II (NMSII) is drafting a second bill on bank insolvency, to be approved in Parliament by the year-end. And by October the parliamentary Economic Commission should discuss the first bill on bank insolvency, filed by deputies from the United Democratic Forces (UDF) on July 19, 2001.Mileti Mladenov, Governing Board Chairman of the Bank Deposit Insurance Fund (BDIF), has proposed 100% gurantee for deposits up to BGL10,000. The transitional and final provisions of UDF's darft bill stipulate full guarantee for deposits up to BGL7,000. Currently, depositors can get up to BGL6,900 in case of a bankruptcy of a credit institution, independent of the amount of their deposits.According to Mr. Mladenov, the draft bill on bank insolvency projects a more flexible mechanism for paying remunerations to the trustees in bankruptcy, depending on the value of the financial institution's assets they have managed to turn into cash. Mr. Mladenov has also proposed that the banks' manadatory provisions into the fund should be not only in BG levs, but in foreign currency as well.The draft bill stipulates also changes in the order for servicing creditors of bankrupt banks. Under the effective legislation, the fund gets its money before the depositors, whose receivables are not guaranteed by BDIF's system. The new bill projects one and the same order for servicing the depositors of bankrupt credit institutions.