Bulgaria has sought European supervision for its banks, as part of a plan to strengthen its financial supervision system, in the wake of collapse of its Corporate Commercial Bank (CCB).

If the EU accepts Bulgaria’s request, the country will be the first outside the 18-nation euro zone to join the European Single Supervisory Mechanism, which has been established to supervise euro zone banks.

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Announcing the same, Bulgarian President Rosen Plevneliev said that the country will also submit itself to a peer review from the European Banking Authority.

"We have a full consensus to immediately start the procedure for Bulgaria’s entry into the Single Supervisory Mechanism of the European Union. This is the first step of Bulgaria’s accession to the EU’s banking union," the president told Reuters.

Due to financial mismanagement, CCB, Bulgaria’s fourth biggest bank found a black hole in its balance sheet.

Bulgaria’s central bank made an announcement last week to let Corporate Commercial Bank (Corpbank) collapse. This is said to be Bulgaria’s worst financial scandal since a domestic banking crisis in 1996-1997. It will still need a state-funded bailout to protect the lender’s depositors.

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The Bulgarian National Bank (BNB) said that it would revoke CCB’s license and transfer its healthy assets to subsidiary Credit Agricole Bulgaria, which would be nationalized. The central bank of Bulgaria also assured that customers will not lose their money, if it takes any action against CCB.

Plevneliev said that the EU banking supervisors have been requested to examine Bulgaria’s banking supervision regulations and suggest the measures to improve bank oversight.

The European Central Bank (ECB), which is accountable for the single supervisory mechanism, will take up these powers on 4 November, according to the news agency.