WHAT IS A DEPOSIT CERTIFICATE AND DOES IT HAVE A PLACE IN THE BULGARIAN BANKING PRACTICE?

MARIANA ASSENOVA-VELIKOVA

 

Abstract

The questions about the nature and application of certificates of deposit in bulgarian practice have not been developed extensively and in its entirety. There are primarily theoretical publications in academic textbooks or articles. This fact is explicable as one of the most common, liquid, low-risk financial instruments in the world do not have a place in the national currency market for quarter of a century.
What are certificates of deposit, what kinds are they, how to calculate the yield on them and how are they traded on the money market are just some of the questions the current article would provide with an answer. More importantly for our practice, however, is to seek answers to the questions: "Does deposit certificates have a place on the Bulgarian money market?", "What are the advantages for depositors and banks with their implementation?", and "What proposals can be made in theoretical and practical aspect to facilitate the acceptance and accounting of deposit certificates as securities?". The author strives to give her interpretation and vision on these matters in the current material.

 

Key words

banks, deposit certificate, fixed money deposit, future value; nominal value of the deposit certificate; annual interest rate on the deposit certificate; contractual term of the deposit certificate

 

References

Assenova, M., St. Baklicharov, M.Vrachovska, Financial Markets, Ruse, Avangardprint, 2008
Galanov, V.A., A.I. Basov, R.A. Antoshkin and others, Securities Market.М., Finance and statistics, 2007
Jasquillat, B., B. Solnik, Marches financiers. Gestion de portefeuille et des risques, Paris, Dunod, 2009
Olivier Picon, La bourse. Ses mecanisme. Gerer son portefeuille. Reussir ses placements, Delmas, 2010
Robert W., Important Information about Certificates of Deposit, Baird & Co. Incorporated. Member NYSE & SIPC, 2009
Димитрова, П., Кредитният пазар в България, в контекста на един сравнителен анализ с други страни ( финансови и счетоводни аспекти), сп. Управление и устойчиво развитие, 2010
Jayaratne, J., D. Morgan, Information Problems and Deposit Constraints at Banks

Regulations

Закон за кредитните институции
Закон за пазарите на финансови инструменти
Закон за публично предлагане на ценни книжа
Закон за гарантиране на влоговете в банките
Наредба №3 на БНБ за плащанията, 1992г.
Наредба №3 на БНБ за условията и реда за изпълнение на платежни операции и за използване на платежни инструменти

Online articles

http://www.banking.us.hsbc.com/personal/deposits/OnlineCD_T&Cs.pdf
https://www.discover.com/onlinebanking/assets/Certificatеofdeposit.pdf
http://www.investinganswers.com/financial-dictionary/income-dividends/certificate-deposit-cd-1289
https://www.citizensbank.com/savings-and-cds/cds.aspx
www.bnb.bg
www.investor.bg
www.econ.bg

 

Full Text: PDF (Bulgarian)