- win strategy as this would limit and make the services offered by banks costlier, which would eventually harm customers and thwart economic growth. in this context, please allow me to also quote the call of the head of state who, following his meeting with the bnb governing council in february, summed up the situation in a fine and very pragmatic way : “ the state should continue to work for the good reputation of our banking system, which is a precondition for more favourable lending and is of benefit to people ”. looking ahead now, we need to stress that coping well in these times of crisis so far does not mean that we can afford to be less watchful or less precise in our next steps. this year, too, will be rich in new challenges. based on the current projections for a recession in the euro area, we expect that the growth rate of the bulgarian economy would slow down to about 0. 7 % in 2012, and this would have a direct impact on the potential of banks in bulgaria to generate incomes from sources of their own. the weak demand for new loans is facing banks with a double challenge. on the one hand, it will be difficult for them to accumulate new buffers from profits ; and on the other hand, the existing classified assets will go on putting pressure on the available reserves. while seeking new business opportunities, you should very carefully approach the question of capital planning. because you are well aware that the bnb makes no compromises with safety. the president of the republic of bulgaria is present today, so i am tempted to take advantage and draw the attention of the responsible state institutions to some significant gaps in the commercial legislation. legal and subjective obstacles get in the way of reducing the share of non - performing loans. bulgaria is no exception among the countries of central and eastern europe where the winding - up and insolvency proceedings, as well as the sale of the collateral, are relatively more sluggish. regretfully, in bulgaria the cases of unethical debtors taking advantage of some weaknesses of the existing insolvency proceedings, which allow them to manipulate the initial date of insolvency and nullify the pieces of collateral bis central bankers ’ speeches pledged after that date, are becoming more and more frequent. the problems with the insolvency and winding - up court proceedings in the corporate sector inhibit the rehabilitation of banks ’ books ( i. e. that part of banks ’ balance sheet assets which has

dimitar radev : it is extremely important to achieve the highest possible synchronisation of monetary and fiscal conditions in bulgaria. with a clear direction of the monetary policy, the focus falls on the upcoming budget decisions speech by mr dimitar radev, governor of the bulgarian national bank, at the opening of the " banks and business " conference, organised by capital newspaper, sofia, 1 december 2022. * * * dear ladies and gentlemen, i am going to speak briefly about three subjects : macroeconomic environment dynamics ; the state of the banking sector ; and the path to the euro area. macroeconomic environment dynamics the dynamics of the macroeconomic environment is strongly influenced by internal political and geopolitical factors. the unknowns surrounding the development of these factors increase the risks, and the uncertainty respectively, of macroeconomic assessments and projections. such an environment entails, inter alia, an appropriate calibration and harmonisation of monetary and fiscal policies. the monetary policy outlook is clear. in brief, this outlook relates to the increase in interest rates and the gradual withdrawal from the unconventional measures that have been implemented in the past few years. for a quite some time now the real question has not been about the monetary policy direction anymore but about the parameters of the monetary policy tightening. these parameters seem to range between the neutral and the restrictive levels of interest rates. the purpose of this exercise is clear : to curb and reduce inflation down to healthy levels by limiting the demand which central banks can influence. to put it in another way, central banks have been focusing a lot more than in recent years on their primary mandate, i. e. price stability. such a development has its price, and it is the slowdown in economic activity, which in the extreme case might lead to temporary recession. the rationale behind central banks'actions is that prolonged high inflation could have a far more detrimental effect on the economic development and people's well - being than a short - term slowdown would have. how does this global trend manifest itself in the light of the specific economic conditions in our country? the short answer is directly, for two reasons : a general one and a more 1 / 5 bis - central bankers'speeches specific one. the general reason is common to all small open economies in the eu, and it is about the high degree of interrelatedness of these countries with the euro area economic developments and policies, in this particular case, with the monetary policy pursued by the ec