The European Commission has agreed to extend a credit line of <br />1.7 billion euros to bolster Bulgarian banks.<br /><br />Authorities in Sofia believe two of the country’s major lenders have come under a systematic speculative attack.<br /><br />Last week the government took over the Corporate Commercial Bank after customers rushed to withdraw deposits. <br /><br />Speculation that other banks would follow ran riot , which resulted in a run on the First Investment Bank, the country’s third largest lender, on Friday. <br /><br />The European Commission said the Bulgarian banking system is fundamentally “well capitalised with high levels of liquidity” and the decision has been taken to safeguard the system.<br /><br />Bulgarian President Rosen Plevneliev sought to reassure investors saying: “The money of individuals and businesses in Bulgaria’s banks is secure. Banks will continue to operate normally.” <br /><br />Authorities made five arrests over the weekend of those suspected of being involved in the plot to undermine Bulgaria’s financial system.
