IMF and EC say foreign banks’ exposure can go down by 5% on March 2009 level

The International Monetary Fund and the European Commission have agreed with the first nine foreign banks in Romania over an exposure rate of 95 percent of the level in March 2009. IMF, Eu and banks' representatives met yesterday in Brussels, together with Romanian Central Bank (BNR) and Finance Ministry representatives from Romania. “Participants agreed that the strengthening of Romania's external position allows for a degree of flexibility concerning the exposure commitments to 95 percent compared to end-March 2009,” writes the official paper issued by the IMF and the EC after the meeting. More than this, some of the banks want an even higher exposure: “At the same time, several banks indicated their intention to increase their exposure to Romania in the coming months as economic activity begins to recover,” writes the statement. As of end-June 2010, the exposure of parent banks to Romania was broadly maintained compared to the benchmark date, which is end-March 2009. “Parent banks provided additional capital for 2009 and 2010, and the capital adequacy ratio of their affiliates has remained above 10 percent throughout the program period,” according to the joint statement. This was the fourth meeting of the European Banking Coordination Initiative for Romania, after those held in 2009 with the nine parent banks of the largest foreign-owned credit institutions with affiliates in Romania: Erste Group Bank, Raiffeisen Group, Eurobank EFG, National Bank of Greece, UniCredit Group, Société Générale, Alpha Bank, Volksbank International, and Piraeus Bank. The meeting was also attended by representatives of the National Bank of Romania, the Romanian Ministry of Finance, the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the World Bank Group, the European Central Bank and the home country authorities. Read the entire release here.