15.05.2012

The package was discussed at today\'s ECOFIN meeting and political agreement was reached on the Council\'s common approach to the dossier. During the meeting Bulgaria made a proposal that had been consulted with and supported by all EU Member States. As per the adopted by ECOFIN Bulgarian proposal a possibility is provided by the end of 2017 the institutions to apply a zero risk weight when determining their capital requirements for positions in pair of currencies where exchange-rate data for the preceding three or five years are perfectly positively correlated and have a zero spread rate.

The Ministry of Finance would like to remind that the CRD IV package introduces the international Basel 3 requirements and is a key element of the financial sector regulatory reform aiming at strengthening, reinforcing and stabilizing the EU financial sector. Bulgaria\'s position expressed many a time at the COREPER meetings and in the working groups, is against the package. The reason being that no account is taken of the need for specific treatment of banks and investment firms operating in Bulgaria in BGN-EUR exposures due to the functioning of the Currency Board Arrangement. Bulgaria carried out intensive negotiations and consultations with Member States and Denmark in its capacity of rotation president of the Council in order to solve the issue in our favor.

\"Taking into account Bulgaria\'s specific issue is an extraordinary success for us not only because of the fact that the specificities of our financial and economic system have been considered but it is also a kind of recognition of the financial stability maintained in Bulgaria in the last 15 years\", Deputy Minister of Finance Boryana Pencheva who participated in the meeting said.

This fact has made Bulgaria\'s support for the Council\'s common approach possible. The common approach to the CRD IV package agreed today allows the launching of negotiations between the Council, the EP and the EC to reach agreement on the dossier and to adopt it on first reading. The proposed in the initial CRD IV package draft risk treatment of closely correlated currencies (such as the BGN and the EUR) did not appropriately take account of the lack of any risk in respect of the denominated in EUR currency exposures of Bulgarian credit institutions and investment intermediaries. Such wording would guarantee that the currency risk treatment in the regulation would be consistent with the implemented in the past 14 years by the Bulgarian authorities policy regarding the stability of the Currency Board Arrangement and with the lack of risk in respect of the denominated in EUR currency exposures of Bulgarian banks and investment intermediaries.