Yesterday, the European Commission and the IMF, in the European Banking Group Coordination Meeting held in Brussels, jointly welcomed the renewed commitments of the parent banks of nine of Romania’s largest foreign financial institutions “to take action needed to support their subsidiaries in the country.” In March, during a meeting in Vienna, Austria, the parent banks “gave a general declaration on maintaining their overall exposure to the country and on increasing the capital of their subsidiaries, as needed.”

Romania has received financial assistance from the IMF and the EU. However, the “success of the [country’s] macroeconomic reform program and the balance of payments sustainability also depends significantly on the continued involvement of foreign banks in Romania.” Since the March meeting, the National Bank of Romania (NBR) has conducted stress tests on certain financial institutions and has concluded they are adequately “capitalised and have high liquidity buffers.” At the conclusion of yesterday’s meeting, the various foreign parents of the banks agreed to “submit specific bilateral commitment letters in the coming weeks to fulfil[l] the objectives agreed upon in Vienna,” some of which include “a precautionary increase in the minimum capital adequacy ratio for each subsidiary from 8 to 10% for the duration of the programme." These commitments, in conjunction with the international financial support that has been pledged by the IMF and the EU, "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.”

Also attending the Coordination Meeting, which was jointly chaired by the EC and the IMF, were the World Bank Group, the European Bank for Reconstruction and Development, the European Investment Bank, the NBR, the European Central Bank and the home country banking supervisors and finance ministries of Austria, France, Greece and Italy.