A coordinated effort to create panic about the health of Bulgaria's banking system has led the European Commission to extend a credit line of 3.3 billion lev ($2.3 billion). That money is being used to stabilize and safeguard the country's banks after customers received mysterious text messages last week urging them to withdraw funds quickly. Bugarian President Rosen Plevneliev and other government leaders have sought to avert a crisis by emphasizing that all money stored with the country's banking institutions is safe.
Corporate Commercial Bank was the first victim of last week's bank run, and withdrawals became so widespread that Bulgaria's fourth-largest lender was forced to shut down and cede control to the central bank. Just days later, customers of First Investment Bank were sent similar warnings, which resulted in long lines at Fibank locations and ATMs. The bank paid out 800 million lev ($558 million) to people in a single day, leading to its own temporarily closing. Several arrests have been made in the case, with the State Agency for National Security accusing those apprehended of sending texts, emails, and social media messages from Facebook and even YouTube "to spread rumors prompting people to withdraw bank deposits."
The unease prompted Bulgaria's President Plevneliev to underline his confidence in the country's financial system over the weekend. "The money of citizens and companies invested in the banking institutions of Bulgaria are safe and guaranteed," he said. "We have enough reserves, means and mechanisms to deal with all destabilization attempts and will stand behind each bank under attack." That vote of support appears to be working. "As a result of the measures taken, the banking sector in Bulgaria operates normally," the central bank said Monday. The Bulgarian National Bank wants to criminalize the act of spreading misleading information about its financial health, putting offenders in prison for up to five years. Despite ongoing problems within its government, Bulgaria's financial system is generally seen as stable and secure.