Банкеръ Weekly

Briefs

PRESIDENT HALTS THE FINANCIAL SUPERVISION COMMISSION

President Georgi Parvanov has put the successive veto on an act, passed with the votes of the ruling majority only. In the summer of 2002 the President vetoed the amendments to the Banks Act, the Act of Biological Diversity, and the Privatisation and Post-privatisation Control Act, and now in mid-December the President did not like the Act on the Financial Supervision Commission, approved by the National Assembly on December 5. Mr. Parvanov points out two motives for the veto he imposed on the act on December 17. The first one is the ban to appeal at court the deeds, issued by the commission, e.g. the revocation of a licence or the refusal to grant a licence. Such a ban is stipulated in the Banks Act as well. It was introduced in 1998 as a result of the multiple appeals, filed at court against BNB's decision for revocation of the failed banks' licences. These appeals delayed the process of cashing the property of closed credit institutions and were an instrument for exerting pressure on the central bank. The ban on the appeals against revoked licences gave BNB a free hand for a quicker and more efficient reaction when closing down insolvent credit institutions. Having learnt a lesson from the central bank's experience, the governors now want to give the same rights to the Financial Supervision Commission. But President Parvanov does not share the philosophy of the parliamentary majority.The second reason for the President's veto on the Act on the Financial Supervision Commission is that the annual fee that has to be paid by the persons liable to supervision is a kind of a tax. BNB's regulations also stipulate fees, but they are not annual. They are charged for a specific service, e.g. for issuing a certificate.The big rights of the financial megacommission gave grounds for agruments when voting the act in Parliament. The Deputy Chairman of the Budget Commission Mouravey Radev was among the most arduous advocates of the thesis that there should be an opportunity for appealing the commission's decisions at court. When discussing the draft bill at second hearing on December 5 he said that the big rights of the supervisory body, without a possibility to appeal its decisions at court, create conditions for abuse of power and generate corruption. The Chairman of the Budget Commission Ivan Iskrov opposed that the ban on appeals is nothing new and is successfully used by BNB's Bank Supervision Department. When discussing the act he underlined that the rights of the new supervisory body have been set by analogy with those of the central bank.The law stipulates that the Financial Supervision Commission shall unite the regulation bodies on the capital, social and pension insurance markets. It will be an independent authority, that will report to the National Assembly only, and will be headed by a chairman, three deputy chairpersons, and three more members. The presidential veto would hardly delay additionally the act's enforcement as of March 1, 2003. The delay may be compensated by shortening the projected 2-month term for approving the commission's management by the National Assembly. Under the Parliament's regulations, within 14 days after the President has imposed a veto on the law, the MPs should discuss and approve the act again. However, this term does not include the deputies' Christmas and New Year recess. Therefore, the discussions will be held in January 2003.

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