Yesterday, the International Monetary Fund (IMF) and the European Commission (EC) issued a joint statement recognizing the implementation of the Bank Coordination Initiative for Romania, whereby the parent banks of the nine largest foreign-owned banks incorporated in Romania have signed bilateral commitment letters “to maintain their respective groups’ overall exposure to Romania” and “to increase the capital of their subsidiaries to maintain a 10 percent capital adequacy ratio throughout the program period.” These commitments are based upon a model agreed to by the nine banks in May and the objectives of which were agreed upon in March.

In July, the EC paid €1.5 billion to Romania as the first installment of a €5 billion balance of payments loan provided by the European Union. Another €1 billion is expected in the last quarter of this year if the conditions are met, and the remaining €2.5 billion is expected to be paid in three installments in 2010 and the first quarter of 2011.