Press Release No. 10/302

Press Release: Joint Press Release by the European Commission and the International Monetary Fund on the European Banking Coordination Initiative Meeting for Romania

July 22, 2010

European Commission and IMF welcome the reaffirmed support of parent banks to their Romanian affiliates.

In a meeting of the European Bank Coordination Initiative held on July 22, 2010 in Brussels, the parent banks of the nine largest foreign-owned banks operating in Romania reaffirmed the support to their Romanian affiliates. These commitments, along with the multilateral financial assistance package, are helping Romania consolidate investor confidence and return the economy to a sustainable growth path. 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.

On July 22, 2010 representatives of the European Commission and the International Monetary Fund met in Brussels 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.

It was the fourth meeting of the European Banking Coordination Initiative for Romania, after those held in 2009. Participants expressed satisfaction that parent banks largely honored their commitments to maintain exposure to Romania at group level and provide sufficient ex-ante capital buffers to their subsidiaries as needed. As of end-June 2010, the exposure of parent banks to Romania was broadly maintained compared to the benchmark date (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.

To support the sustained efforts of the national authorities and ensure the economy’s return to a sustainable growth path, parent banks reaffirmed their long-term commitment to the country. With the global economy stabilizing, participants agreed that the improvement in Romania's external position since the beginning of the programme allows for a degree of flexibility in the exposure commitments to 95 percent. 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. Participants reiterated the importance of accelerating the absorption of EU structural funds and the improved involvement of the private sector in this process.

During today’s meeting, participants were also briefed on progress in fulfilling policy conditions under the multilateral financial assistance program. Further discussions with the authorities will be held by the European Commission and the IMF during the upcoming review mission of the multilateral financial assistance program from 26 July to 4 August 2010.