BRUSSELS -- The European Union's competition authority says it has approved a 3.3 billion-Lev ($2.25 billion) emergency credit line the Bulgarian government is offering its banks to stabilize the financial system.
Rumors of liquidity shortfalls this month have caused panic and runs on deposits at major Bulgarian banks despite the authorities' insistence that there was no reason for depositors to worry.
The EU Commission, the 28-nation bloc's antitrust authority, said Monday Bulgaria's loan doesn't violate state aid rules and "provides the necessary and proportionate liquidity" to restore trust in the banks.
The Commission says the rumors hit the banks "despite the fact that the Bulgarian banking system is well capitalized."
Bulgaria's fourth-largest lender, Corpbank, has been put under special central bank supervision after suffering a run.
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