Mugur Isarescu: Banks in Romania can cope with adverse developments

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Central bank Governor Mugur Isarescu has held the first press briefing on Wednesday after Greece’s default. The main theme of the briefing was related to the monetary policy meeting held by the central bank and to the situation in Greece and in the region.
“Banks with majority Greek capital have a moderate role in the Romanian banking sector. They are on the third place with 12%, according to data in April 2015. There are no Greek banks in Romania, they all are Romanian banks with Greek capital. In banks’ top 5 there is no bank with Greek capital. There are two in top 10 banks,” the governor said, according to
He underscored that the Greek authorities’ decisions do not apply to banks with Greek capital in Romania: “The four banks with Greek capital are Romanian legal entities and obey the laws of Romania.”
Isarescu says Romania’s banks can cope with adverse developments. “The solvency ratio is significantly above 17%, above the European level of 8%. The quality of own funds the banks with Greek capital have is good. Romanian banks with Greek capital have liquid assets at an appropriate level. All four banks have either cash or have government bonds that can be quickly converted into cash,” Mugur Isarescu said.
He said that banks with Greek capital are not dependent on parent banks. Financing lines from parent banks account for 27% of their total liabilities, most financing have a maturity of over one year.
On the other hand, Isarescu said BNR permanently monitors the international situation and tries to avoid by any means any phenomenon of bank panic. BNR has all the tools open – there is no instrument we cannot use – to maintain stability. BNR may also be lender of last resort. Not all central banks have that function. We have this possibility and not only through repo operations, the governor told the media.
“But emotion is a feeling that cannot be countered only with words. In situations as that in Greece it is normal to experience emotional reactions, but we hope reason would prevail,” Isarescu concluded.

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