Parent banks of the nine largest foreign banks incorporated in Romania
reaffirms commitments to Romanian subsidiaries

Brussels, May 19 /Agerpres/ - The reaffirmed commitments of the parent banks of the nine largest foreign banks incorporated in Romania to take action needed to support their subsidiaries in the country, along with the balance of payments support package, will help Romania's banking system to weather the current crisis better, restore investor confidence, and return the economy to a sustainable growth path, European Commission spokesman Mark English told Agerpres in Brussels after the parent banks of the nine largest foreign banks incorporated in Romania committed to support their Romanian subsidiaries at a meeting in Brussels.

English also said that the European Commission will continue its efforts to facilitate cooperation among all players, banks included, in promoting economic recovery in the entire European Union.

The meeting on Tuesday in Brussels, attended by nearly 60 persons - officials of the European Commission, the International Monetary Fund and other international financial institutions, as well as commercial banks and supervisory bodies - discussed the economic and financial state of affairs in Romania. Similar meetings are held for other countries receiving assistance for their balance of payments.

The parent banks of the nine largest foreign banks incorporated in Romania (Erste Group Bank, Raiffeisen International, Eurobank EFG, National Bank of Greece, Unicredit Group, Société Generale, Alpha Bank, Volksbank, Piraeus Bank) reconfirmed on Tuesday in Brussels a general declaration on maintaining their overall exposure to the country and on increasing the capital of their subsidiaries, as needed, initially released at a March 29 meeting in Vienna. Among these banks' commitments is a precautionary increase in the minimum capital adequacy ratio for each subsidiary from 8 to 10 percent for 24 months, the duration of the programme agreed upon between Romania and the IMF.

In March 2009, Romania agreed a two-year financial arrangement with the IMF worth 12.95 billion euros, with the total external financing package, including contributions from the IMF, the European Union, the World Bank and the European Bank for Reconstruction and Development (EBRD) expected to reach 19.95 billion euros.

At their meeting in Vienna, the parent banks signalled out that 'we are aware that it is in our collective interest and in the interest of Romania for all of us to subscribe to coordinated commitments to maintain our overall exposure to Romania; we also acknowledge that our subsidiaries in Romania will have to adjust to the current challenging economic environment. A need for additional capital cannot be excluded, and will be provided as necessary.'

At the same time, they said, 'We have taken note of the agreement reached between the IMF and the BNR to run stress-tests based on established IMF methodology to estimate the potential losses that the Romanian banks might face under diverse scenarios during the period of the IMF/EU program. We support this exercise and agree to support our Romanian subsidiaries in order to: confirm that these affiliates' current good financial standing will be preserved throughout the period of market turbulences and economic slowdown; demonstrate our long-term commitment to the development of the Romanian economy; and signal our willingness to contribute to the efforts of the international community to put in place a comprehensive and well-coordinated response to the crisis.'

'We are therefore prepared to make these commitments, within the framework of the multilateral support programs, on a bilateral basis with the BNR, and with the involvement of our home country supervisory authorities, according to European and the respective national regulatory frameworks,' the banks concluded.

[Source: Romanian National News Agency AGERPRES ]