The Bulgarian Currency Board – A Relic from a Turbulent Past or a Necessary Tool for Economic Stability

This paper aims to explore the history, structure, and economic consequences of the currency board in Bulgaria, which was introduced as an emergency measure to combat the late-nineties economic crisis, though has stayed in place ever since. The paper provides a brief description of the general theory of currency boards, followed by a detailed analysis of the various aspects of the economic crisis during the Videnov government, resulting from the return to centralized and state-led economic policies: high infl ation, shrinking of household incomes and savings, deterioration of trust in the banking system, collapse of the baking system and national budget crisis.