SOFIA: Bulgaria's president denied on Sunday its banks were on the verge of collapse as six people were arrested for “spreading false information” about the health of the country's financial institutions.
“There is not a crisis in the banking sector. There is a crisis of confidence and a criminal attack,” President Rossen Plevneliev said after announcing a declaration of support from Bulgaria's main political parties for central bank governor Ivan Iskrov.
Six people were arrested over the weekend for “spreading false information”, the National Security Agency said.
On Friday, messages spread online and via mobile phones said the First Investment Bank (FIB), the country's third largest, was in dire financial straits.
The rumours provoked scenes of near panic in the capital, with lines quickly forming outside bank branches as clients rushed to withdraw cash.
A small explosion on Saturday outside a bank in Shumen, in northeastern Bulgaria, contributed to the unrest. Central bank governor Iskrov insisted in a statement on Friday that the banking system was “functioning without problem”.
Bulgarian banks collectively hold the equivalent of 20.6 million euros ($28 million) in deposits from individuals, and 11.8 billion euros ($16.1 billion) from companies, he added.
Bulgarians have bitter memories of a grave financial crisis in 1996-97, when 14 banks, many of which owned shares in the others, went under in a little over one year.