BANKING CRISIS IN BULGARIA AND THE EMERGENCE OF BANK

БАНКОВАТА КРИЗА В БЪЛГАРИЯ И ПОЯВАТА НА БАНКА „БЪЛГАРСКИ КРЕДИТ“ 1934 Г.
BANKING CRISIS IN BULGARIA AND THE EMERGENCE OF BANK "BULGARIAN CREDIT" 1934

Author(s): Daniel Vachkov
Subject(s): Economy
Published by: ЮГОЗАПАДЕН УНИВЕРСИТЕТ »НЕОФИТ РИЛСКИ«
Keywords: Great Depression; credit policy; Bulgarian Credit Bank; BNB; merger; bank consolidation
Summary/Abstract: The global economic crisis of 1929 - 1933 affects severely the banking system in Bulgaria. Consisting of many small private and popular banks with limited capital, it proved unable to meet the destructive effects of the decline in production and trade. The vast majority of Bulgarian banks are forced to bankrupt or shrink their activity to the minimum. The sharp limitation of lending to the Bulgarian economy and the loss of confidence among depositors necessitate urgent changes in the banking sector. In October 1934, through the merger of 12 Bulgarian and provincial banks Bulgarian Credit Bank is launched. BNB participates in the formation of the share capital and in the governing bodies of the Bank, wich defines the semi-state status of the new banking institution. Only for a year of its existence, BCB has established itself as one of the largest and stable Bulgarian banks and contributes to the strengthening of the banking system in Bulgaria in the years following the Great Depression.