Bulgarian central bank says banking system under attack

Source: Reuters

SOFIA, June 27 (Reuters) - Bulgaria's central bank warned on Friday of a systematic attempt to destabilise the country through attacks on the banking system and vowed to use everything at its disposal to protect citizens' savings.

Shares in Bulgarian banks fell sharply for a second day on speculation that a run on deposits at the country's fourth-biggest bank, Corporate Commercial Bank (Corpbank) , could spread to other lenders and shake Bulgaria's already weak economy and those of its neighbours.

The central bank took control of Corpbank last week and said its problems were isolated. Economists and Fitch Ratings agency have also played down the risk of contagion, while foreign banks with subsidiaries in Bulgaria insist their operations are safe.

But comments by a deputy from the country's ruling party on Thursday that another bank may suffer a similar fate further jolted confidence and left investors scrambling to ditch Bulgarian bank stocks.

Read more: http://in.reuters.com/article/2014/06/27/bulgaria-banks-idINL6N0P81SG20140627