the low interest rates have on the bulgarian economy? the immediate effect is positive. the increased credit activity is one of the indicators for this. such a development, however, is connected with some serious challenges, for instance the profitability of the banks as a result of the diminishing interest margins. i should say that so far the bulgarian banks manage to deal with this challenge. cyclical risks are also accumulating, due to which bnb activated and subsequently increased the level of the countercyclical capital buffer for banks. in recent years we have seen a few large deals in the bulgarian banking system. do you expect the consolidation to continue in the future? is it a completely positive phenomenon? consolidation is one of the possible responses to the challenges facing the banks. i expect this process to continue. 3 / 3 bis central bankers'speeches

. what practical changes would this bring to the work of banking supervision? the changes are of a regulatory and administrative nature. a large part of them have been prepared already and we are ready for their introduction on the date of our effective accession. under the close cooperation mechanism the ecb exercises direct supervision over the largest banks and there the bnb will be involved with the participation of bnb ’ s experts in the supervisory teams. an ongoing active exchange of supervisory information will be established between us and the ecb concerning the other banks that will remain under bnb ’ s direct supervision. countries like hungary, poland and especially the czech republic are markedly against joining the eurozone at this point. is the currency board the main difference between them and bulgaria which explains this discrepancy between policies, or are there other factors at play? 1 / 3 bis central bankers'speeches this is a political decision, above all. what ’ s positive in our case is that this decision is based on strategic and not conjunctural considerations. practically, there isn ’ t a serious political factor in our country that does not support this decision. on the technical level, the monetary regime in bulgaria allows for its implementation to happen quicker and seamlessly. you said in an interview for market news this spring that the downturn in europe could turn out to be temporary, but that would remain to be seen. how would you comment the developments in recent months? uncertainty is on the rise and a lot of current data indicates a continuing economic downturn in the eurozone. this motivates the ecb to make decisions for an even more stimulating monetary policy. the technical details and the degree to which the ecb decided to step up its policy are a subject of debate, but the basic macroeconomic motivation behind these decisions is clear, in principle. responding to a question by investor. bg, bnb says that given the lev ’ s fixed exchange rate, delaying the entry into erm ii cannot create direct financial and macroeconomic risks for the bulgarian economy. could the opposite happen, however? is it possible for erm ii membership to be negative for bulgaria if it comes during unfavourable times for the european economy? to put it in different words, should we be in a hurry for the eurozone or should this goal be consistent with the conditions and trends for the time being? we should follow our strategic plan with a focus on the quality of the process. due to the nature of our monetary regime