How Would Bulgaria Be Affected by a Global Financial Crisis and What Risks Does it Pose?

The financial crisis in 2008 began with the bankruptcy of the state-owned “Lemon Brothers”. Now there are quite a few facts that coincide with the situation then – bankruptcy of 3 banks in America. For the first time, Switzerland, which is always synonymous with financial stability, is experiencing serious problems with Credit Suisse, the second largest bank. Experts do not give an unequivocal forecast of whether we are on the threshold of a new crisis. But they hope for a good scenario and reassure themselves that the banks in our country have good liquidity.

The financiers are categorical – we are on the threshold of a recession. And the bankruptcy of banks in the USA and the plight of Credit Suisse only accelerates the process.

“Actually, we are already in crisis. There is no doubt about it. In the US, we definitely already have a banking crisis, we have 3 regional banks in the States that have failed, quite a serious breach of trust. When one of the largest banks in the world and one of the largest “advertisers in Europe such as Credit Suisse are practically disappearing ingloriously, this is also a crisis. European banks are trading at extremely low prices and their prices are collapsing day by day,” said financier Dimitar Georgiev.

“It remains to be seen in the coming months whether we will enter an economic recession. The first signs of this kind of thing are already visible in Europe, in the developed western economies, especially Germany and France. Bear in mind that it is quite normal when we enter an economic recession, the banking sector to suffer,” commented financier Nikola Filipov.

What would be the repercussions of a new financial crisis in Bulgaria? Higher interest rates and correspondingly more requirements for taking a loan, experts explain.

“If things continue and deepen, it is quite possible that in Bulgaria we will also see a serious devaluation of assets, if you will, of real estate, as we saw in 2008-2009. As well as increasingly difficult access to credit. This is rather a bad scenario that the central banks will not allow”, Dimitar Georgiev believes, NOVA reported.

But still, they do not think that there is a real danger of a crisis in our country.

“At least at this stage, Bulgarian banks are extremely liquid, highly capitalized and for them there is no risk from the negative trends that are taking place in the States and Europe”, believes Nikola Filipov.