Bulgaria: Regulation No. 8 on the Capital Adequacy of Banks

This document discusses a regulation on the capital adequacy of the Bulgarian Banks.

The document is divided into chapters and provides information on:

• General provisions of the regulation describing the structure, the different ratios that a bank in Bulgaria has to maintain from its capital base, and the kinds of financial institutions to which this regulation would apply;
• The minimum capital requirements for the nationalized, private and foreign banks;
• The terms and conditions under which the branches of foreign banks could be exempted from capital adequacy requirements;
• The different sources from which a bank could establish its own capital funds;
• The different balance sheet items that could get excluded from the risk component of a bank's balance sheet, and also how off-balance sheet items could be equalized after conversion of their carrying value to be included in the risk component;
• The department, the time period of submission and the kind of information that should go in the report on risk components and capital adequacy;
• The prohibition on distribution of profits of retained earnings to a degree and in a manner that would lead to non-compliance with capital adequacy requirements;
• The kinds of processes to follow to secure a grace period for compliance incases of failure of meeting different deadlines;
• The penalties that are likely to be invoked for violation of the regulation.