Following five months of tense waiting and permanent protests against the sluggish ways of competent authorities, a quarter million individual depositors and 6000 companies can at long last take their money back from the collapsed Corporate Commercial Bank (CCB) plus up to 100,000 euro in savings guaranteed by the law. Nine banks have started the pay-out of deposits and in a single day have paid back savings worth 500,000 euro to their owners.

The question that experts are asking now however is where the huge (at least for Bulgaria) financial resources worth 1.6 billion euro will go. True, the money won’t leave the former bank at once, because depositors have been given five years to reclaim their savings. It is however clear that only few will leave their money frozen. CorpBank depositors have got a few options for their cash thanks to the Bulgarian Deposit Insurance Fund and the huge financial support that the state has provided for it by filling its reserves at the cost of fresh public debt.

One option for depositors is to draw cash from banks. The banks who service CorpBank customers however report that this is not a popular scenario and that only 1% of depositors have opted for it. Most probably, this is no good news for the economy, given that a few analysts expected that this money could get out on the market and boost consumption on the eve of the Christmas holidays acting as a lifebelt to waning businesses.

The second option is the transfer of savings to another, more reliable bank. It seems that most depositors have chosen to act exactly this way. This implies that fresh amounts of money will enter Bulgarian banks, make them healthier, add to their quite good liquidity and stabilize the banking system. Lenders have not rejoiced at this super liquidity though, and have moved to lower interests on deposits. On the other hand so much money concentrated in the banks will get lenders into lowering interests on loans too, so that they could profit from the fresh resources they are getting. At the end of the day, this amount will land in the country’s economy.

English Daniela Konstantinova