Fitch: Outlook for Romania's banks stable, but at risk
Parent banks are likely to reduce funding to subsidiaries in the region. This, according to Fitch ratings, is particularly bad for Romania as the local banking sector is heavily reliant on foreign funding. The ratings agency thinks the major international banks in Romania are unlikely to pull out and that they will continue to support the local banking sector, but warns “they will more tightly ration funding and capital.”
The eurozone crisis throws a shadow over countries outside the single currency and Fitch admits that outlooks and ratings for Romania and the region's banking sectors could suffer if the crisis takes a turn for the worse. Worsening recession could effect parent banks' default ratings and funding for Romanian banks would be reduced if exports to the eurozone dropped.
reporting by Alex Camburu, alex.camburu@romania-insider.com
editing by Liam Lever, liam@romania-insider.com
(photo source: Sxc.hu)