Press Release: Joint IMF, EC Press Release on the European Banking Group Coordination Meeting for Romania
May 20, 2009Press Release No. 09/178
May 20, 2009
The parent banks of the nine largest foreign banks incorporated in Romania (Erste Group Bank, Raiffeisen International, Eurobank EFG, National Bank of Greece, UniCredit Group, Société Generale, Alpha Bank, Volksbank, Piraeus Bank) met in Brussels on May 19 and agreed to submit specific bilateral commitment letters in the coming weeks to fulfill the objectives agreed upon in Vienna on March 26, when they gave a general declaration on maintaining their overall exposure to the country and on increasing the capital of their subsidiaries, as needed.
Following the Vienna meeting, the National Bank of Romania has conducted stress tests and the results have been discussed with the banks. The outcome confirms that they are well capitalized and have high liquidity buffers.
The commitments agreed yesterday, including a precautionary increase in the minimum capital adequacy ratio for each subsidiary from 8 to 10% for the duration of the programme, along with the international financial support package, will help Romania’s banking system to weather the current crisis better, support investor confidence, and guide the economy to a sustainable long term growth path.
The European Banking Group Coordination Meeting for Romania was jointly chaired by the European Commission and the International Monetary Fund (IMF). The World Bank Group, the EBRD, the EIB, the National Bank of Romania, the home country banking supervisors and ministries of finance (Austria, France, Greece, and Italy), and the European Central Bank also attended the meeting.
In light of the adverse effects of the global financial crisis on the economic and financial situation in Romania, the Romanian authorities requested balance of payments support from the IMF (see Press Release 09/148), the EU, and the World Bank. The EBRD, the EIB, the IFC, and MIGA are also providing financial support, including under the Joint IFI Action Plan.
The success of the macroeconomic reform program and the balance of payments sustainability also depends significantly on the continued involvement of foreign banks in Romania.