The Bulgarian National Bank will not participate in political polemics and will continue to present its professional assessments within the framework of its legal mandate. This was stated by the central bank in connection with the public statements about the position of Governor Dimitar Radev from September 25.
The BNB points out that the assessment of the possible consequences of measures that may affect the banking sector, financial intermediation, lending conditions and financial stability is part of the institutional functions of the central bank. According to the institution, this approach also corresponds to the established practice in the Eurosystem.
They emphasize that decisions regarding tax and budget policy are within the competence of the government and the National Assembly. The presentation of a professional assessment of the possible consequences of these decisions for the financial system and the economy, according to the BNB, does not constitute participation in the political process.
The central bank also highlights the principle of central bank independence as a fundamental part of the institutional framework of the Eurosystem. According to the BNB, it implies that the institution and the members of its governing bodies perform their assigned functions and form their professional assessments regardless of political considerations.
The position comes after criticism by Deputy Prime Minister and Finance Minister Galab Donev of BNB Governor Dimitar Radev. Donev said that Radev was going beyond his powers and taking a political position with his statement on the proposed additional taxation of bank profits.
In his statement on September 25, Radev pointed out that the proposal for additional taxation of bank profits should be considered not only through the expected budget revenue, but also through its possible consequences for credit, interest rates, investments and economic growth. He noted that part of the burden of such a tax could be transferred to customers through the price of loans and financing conditions.
The BNB now clarifies that the governor's statement was not a position in the political dispute over tax policy, but a professional assessment of the possible economic consequences of the proposed measure.
“The Bulgarian National Bank will not participate in political polemics“, the central bank stated, adding that they will continue to perform their functions in accordance with their legal mandate and the institutional framework of the European System of Central Banks and the Eurosystem.