The ECB exercises banking supervision in cooperation with the national authorities by establishing a common approach to ongoing supervision, pursuing harmonized supervisory activities and corrective measures and ensuring consistent implementation of regulations and supervisory policies. The ECB has the powers to conduct supervisory review, on-site inspections and investigations, to issue or withdraw banking licenses, to assess the acquisition and disposal of qualified holdings by banks, to ensure compliance with the EU prudential rules, to set higher capital requirements (buffers) to counteract possible financial risks. The supervisory functions of the ECB are exercised by its Supervisory Board. By a decision of the BNB Governing Council, Mr. Radoslav Milenkov, BNB Deputy Governor in charge of the Banking Supervision Department, is the BNB’s representative in the ECB’s Supervisory Board, having the same rights and obligations as all other board members, including a voting right. The ECB’s Supervisory Board drafts the decisions that are later adopted by the ECB’s Governing Council, following the so-called non-objection procedure. The ECB’s Governing Council also adopts other decision on the SSM general framework, without applying the non-objection procedure. There is no Bulgarian representative in the ECB’s Governing Council, as it consists of the members of the ECB’s Executive Board and the governors of central banks of euro area Member States. The ECB is responsible for the supervision of the institutions determined as significant in all aspects of their activities, including off-site supervision, on-site inspections, the so-called horizontal functions: supervisory methodology, assessment of models, licenses, assessment of reliability and suitability of banks’ management board members.

With regard to institutions and groups, which have not been classified as significant and do not operate cross border, the national resolution authorities exercise fully their powers for resolution planning, assessing resolvability and the possibility to address the impediments to a resolution, as well as the resolution actions. At the same time, in order to ensure the effective and consistent implementation of the resolution framework, the SRB issues guidance and general instructions to the national resolution authorities regarding the performance of the tasks and adoption of resolution decisions. Within the SRB, the national resolution financing mechanisms are replaced by the Single Resolution Fund (SRF), where the credit institutions from the participating Member States make ex-ante, and if needed, ex-post contributions. The decisions about determining the amount of banks’ contributions to the SRF and about the SRF funds management are taken by the SRB. It is the national resolution authorities that are responsible for informing the banks about their calculated individual contributions and for raising and transferring the contributions to the SRF. Using the funds to finance the resolution of failing credit institutions within the Banking Union is an exceptional power conferred to the SRB. The SRB will perform this function with regard to both the banks in Bulgaria which are directly supervised by the ECB and the banks for which the BNB continues to be, even within the SRM, the resolution authority with direct powers.