The European Commission said on Monday it had approved a Bulgarian request to extend a credit line of 3.3 billion levs (€1.68 billion) in support of banks that have come under speculative attack.

“The commission concluded that the state aid implied by the provision of the credit line is proportionate and commensurate with the need to ensure sufficient liquidity in the banking system in the particular circumstances,” the EU executive said in a statement.

The statement said Bulgaria's banking system was "well capitalised and has high levels of liquidity compared to its peers in other member states. For precautionary reasons, Bulgaria has taken this measure to further increase the liquidity and safeguard its financial system".

The move follows runs by jittery depositors on two major Bulgarian commercial banks in the space of a week.

Reuters