Romania’s banking sector has the capacity to withstand a moderate to high shock in case of financing withdrawal by foreign banks, determined by a worsening conflict in Ukraine, said Romania’s National Bank (BNR) in its most recent financial stability report.

The banking sector has enough resources, as both the equity ratio and liquidity ratio have improved significantly form December 2012 until June 2014, according to this report.

The overall equity ratio for the local banking system, which is calculated as the bank’s own funds (shareholders’ equity and subordinated loans) divided by the value of its assets, was 17% at the end of June 2014. The liquidity ratio increased from 1.4 to 1.6.

editor@romania-insider.com