dimitar radev : crisis management framework in bulgaria summary of statement by mr dimitar radev, governor of the bulgarian national bank, at the annual meeting of governors and other central bank representatives from the countries of the dutch - belgian constituency of the imf, organised by the national bank of belgium, brussels, 24 february 2017. * * * the closure of the fourth largest bank in bulgaria in 2014 put to the test the country ’ s financial stability. this incident revealed, among other things, serious limitations in our crisis management arrangements in the banking area and, more specifically, the lack of a proper institutional framework to deal with resolution of systemically important banks. our policy response to the 2014 crisis was incorporated in an 18 - month plan adopted in mid2015, defining concrete actions in three priority areas : an independent assessment of : ( 1 ) the banks in bulgaria ( through an aqr and stress tests that were completed in 2016 ), and ( 2 ) our crisis management framework ( through a still ongoing financial sector assessment, fsap, by the international monetary fund and the world bank ) ; a comprehensive reform of the central bank ’ s banking supervision and regulation framework and practices, based on the basel core principles ( bcp ) ; introducing the bnb ’ s new bank resolution functions compliant with the european bank recovery and resolution directive ( brrd ). the implementation of the plan helped build sound foundations for our crisis management framework. its main elements now include : the financial stability advisory council ( fsac ) : a consultative body comprising the minister of finance, the governor of the central bank, and the chairman of the financial supervision commission ; the central bank as the designated resolution authority for banks ; the resolution function of the bnb is outlined in the law on recovery and resolution of credit institutions and investment firms, adopted in mid - 2015, which transposed the brrd in the bulgarian legislation ; a mechanism to fund resolution measures by the newly established bank resolution fund ( brf ) which is funded by contributions from the banks ; the target level of the resources collected in the brf is 2 % of the amount of covered deposits of all banks licensed in bulgaria and must be achieved by end - 2024 ; a comprehensive resolution toolkit directly transposed from the brrd comprising : ( 1 ) the resolution tools ( sale of business ; bridge institution, asset separation, and bail - in ), and the government stabilization tools ( public equity support and temporary public ownership ). progress has been

be supported by high levels of capacity utilisation and further improvements in labour markets. the unemployment rate declined to 8. 1 % in september 2018, which is the lowest level observed since late 2008, and employment continued to increase in the third quarter. moreover, business investment is supported by still very favourable financing conditions in the euro area, together with solid demand and rising profitability. regarding price developments, hicp inflation increased to 2. 2 % in october 2018, from 2. 1 % in september. measures of underlying inflation continue to be muted, but have increased from earlier lows. generally, there is good reason to be confident that underlying inflation will gradually 1 / 4 bis central bankers'speeches rise in the period ahead. wages are rising as labour markets continue to improve and labour supply shortages become increasingly binding in some countries. higher wage growth, as well as a recovery in producer and import prices, is expected to continue to support the upward adjustment in underlying inflation. in addition, long - term market and survey - based inflation expectations are reasonably well anchored and broadly in line with this outlook. overall, recent developments confirm the governing council ’ s earlier assessments of the medium - term inflation outlook. the underlying strength of domestic demand and wages continues to support our confidence that the sustained convergence of inflation to our aim will proceed, and will be maintained even after a gradual winding down of our net purchases. the governing council therefore continues to anticipate that, subject to incoming data confirming our medium - term inflation outlook, net asset purchases will come to an end in december 2018. at the same time, prevailing uncertainties still call for patience, prudence and persistence in calibrating our monetary policy stance. significant monetary policy stimulus is still needed to support the further build - up of domestic price pressures and headline inflation developments over the medium term. to ensure that inflation continues to move towards our aim in a sustained manner, a significant degree of monetary policy stimulus will be maintained, even after the end of net asset purchases. this will be provided by the enhanced forward guidance pertaining to the path of interest rates and by the sizeable stock of acquired assets and the associated reinvestments. emu reform and the ecb ’ s monetary policy in keeping with the topics you have chosen for today ’ s exchange, let me now discuss why a more complete emu would support the ecb ’ s monetary policy. in particular, i will discuss two sets of challenges which arise in an incomplete emu where monetary policy