* Governor writes letter to parliament
* Says central bank is not a political "toy"
* Main opposition party demands governor's resignation
* Governor blames lawmakers for derailing bank rescue
* Government expected to resign on Wednesday
(Adds quote, details, background throughout)
By Tsvetelia Tsolova
SOFIA, July 22 Bulgaria's Central Bank Governor
Ivan Iskrov told parliament on Tuesday he was ready to step down
if it can agree on a successor first.
In a letter, first reported by Reuters and then subsequently
published with a statement on the central bank's website, Iskrov
said he would not let the bank be used as a political "toy"
ahead of a general election due to be held in October.
The central bank has been attacked for its handling of
Bulgaria's worst banking crisis since the 1990s, in which
Corporate Commercial Bank (Corpbank), the country's
fourth largest lender, shut after a run on deposits in June.
Depositors, unnerved by reports of shady deals involving
Corpbank's main owner, withdrew more than a fifth of deposits in
a week-long bank run. The owner, who was also locked in a public
feud with a business rival at the time, denied wrongdoing and
said the run was a plot hatched by his competitors.
During the run, news also leaked that the central bank
deputy governor in charge of banking supervision was being
investigated for abuse of office. Iskrov said at the time that
the leak was tantamount to a deliberate "attack" on Corpbank's
credibility. The deputy has taken a voluntary leave of absence
and has not commented publicly on the investigation.
The central bank and the government have pursued various
options to put Corpbank back on its feet, including a rescue
package under which the bank's healthy assets and liabilities
would be hived off into a subsidiary.
However, that plan was rejected by lawmakers in July. The
main opposition GERB party, which is tipped to win the October
election, has demanded Iskrov's resignation and said the central
bank should take responsibility for the Corpbank crisis.
Prime Minister Plamen Oresharksi's technocrat government is
expected to step down on Wednesday, after the ruling Socialist
party's poor performance in May's European elections.
"The governor of the Bulgarian National Bank has sent a
letter to the National Assembly, in which he expresses his
readiness to resign if the assembly musters an agreement to
choose a new governor," the central bank's spokesman said.
"The aim is not to leave the central bank without management
during a continuing political crisis," he said.
Under Bulgarian law, the governor has to step down three
months after announcing his resignation. If lawmakers cannot
agree on a successor, it could leave the bank without a governor
- which is why Iskrov stipulated that the current parliament
must find a replacement first.
If his proposal is accepted, there is a limited time frame
for him to step down. The current parliament will be dissolved
in early August to make way for an interim government, appointed
by the president, which will rule for two months.
"I definitely do not accept the ongoing attempts for the
Bulgarian National Bank to be used as an electoral party toy
through personal attacks against its governor," Iskrov said in
the letter to the parliament.
Iskrov, who was known for keeping a low public profile until
the Corpbank crisis erupted, is in his second term as governor
and his tenure expires in October 2015.
In the letter he said initial talks with Brussels on the
plan to move Corpbank's assets to a subsidiary had indicated
support from the European Union for the plan, as had a promise
by the government to protect all of Corpbank's depositors.
The run on Corpbank prompted the central bank to seize
control of the lender for three months, block depositors from
taking out money and commission an audit of Corpbank's books.
Sofia has estimated the public rescue cost at about 1.5-2
billion Bulgarian levs ($1-1.4 billion). The results of the
audit showed activities in the bank "incompatible with the law
and good banking practices", according to the central bank. It
also said that crucial information about Corpbank's loan
portfolio was missing.
Originally the central bank had proposed reopening Corpbank
on July 21, a plan that Iskrov in his letter said was scuppered
by a lack of political consensus on how to deal with the fallout
of the bank run.
($1 = 1.4498 Bulgarian Levs)
(Writing by Matthias Williams Editing by Jeremy Gaunt)