Bulgaria Lawmakers Dismiss Deputy Central Bank Chief on Corpbank

The Bulgarian parliament dismissed Tsvetan Gounev, the central bank deputy governor in charge of bank supervision, over the failure of Corporate Commercial Bank AD, the country’s fourth-largest lender.

All present 108 lawmakers voted to back the motion, introduced by the ruling Gerb party, with no votes against, nor abstentions, Speaker Dimitar Glavchev said in Sofia on Wednesday. The Bulgarian Prosecution started a pre-trial investigation against Gounev in June, which forced him to take a leave of absence. Corpbank ran out of liquidity and was placed under central bank supervision on June 20, causing the worst banking crisis in Bulgaria in 17 years forcing the Socialist cabinet to resign.

Gounev “did not impose the required supervision measures on the bank and didn’t establish violations in its operation,” the motion said. He “had relations with the bank’s owners, which didn’t correspond to his supervisory position.”

The central bank revoked Corpbank’s license two months ago saying it has negative equity of 3.7 billion lev ($2.2 billion). Gerb’s minority cabinet, which took office on Nov. 7, took a 1.5 billion-euro ($1.7 billion) international loan to help repay deposits in Corporate Commercial. Standard & Poor’s cut Bulgaria’s credit rating to junk, in December, citing weaknesses in its banking system and the sluggish economy.

The vote in the chamber follows a Dec. 11 Sofia Court of Appeals ruling to relieve Gounev. Under the constitution, only parliament can name or dismiss the central bank governor and his deputies.

Gounev hasn’t commented on the charges and his lawyer Trendafil Trendafilov did not respond to four Bloomberg phone calls on his land line.

About 90 percent of the deposits in Corpbank, or 3.25 billion lev, were repaid through nine banks and 2 percent of them were withdrawn in cash, while the rest remained in the lenders, the Bank Deposit Guarantee Fund said on Jan. 8.

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