NATIONAL
BANKOF
OF ROMANIA
ROMANIA
NATIONAL
BANK
Main Steps of the Bank Reform
?
1990: beginning of bank reform by introducing the two-tier
banking system (central bank + commercial banks);
?
1991: Law No. 33 on Banking and Law No. 34 on the
Statute of the National Bank of Romania (NBR);
?
1997-1998: improvement and supplementation of the
legislative framework for the regulation of banking and
central bank’s activity – new laws:
? Bank Privatisation Act: Law No. 83/1997;
? Banking Act: Law No. 58/1998;
? Bank Insolvency Act: Law No. 83/1998;
? National Bank of Romania Act: Law No. 101/1998.
NATIONAL BANK OF ROMANIA
Harmonisation of banking legislative and regulatory framework
with EU Directives – steady concern of the NBR
?
Progress in harmonisation of prudential supervision and accountancy practices :
? New banking laws (1998), including subsequent amendments (the latest – 2001);
? Regulatory framework for credit cooperatives (2000);
? NBR’s norms:
? on access of credit institutions to banking business (minimum capital, licensing
requirements);
? on banks’ pursuit of banking business (own funds, solvency, large exposures, derivatives);
? harmonisation of accountancy practices: banks’ chart of accounts, introduction of the
International Accounting Standards, annual and consolidated accounts ;
?
The relevant acquis will be fully incorporated in 2002– 2003:
? amendment of The Banking Act (2002) and adjustment of the present regulatory
framework (2002-2003);
? adjustment of bank chart of accounts and prudential regulations on pursuit of
banking business to the requirements of credit cooperatives (2002);
? regulations on internal control of credit institutions (2002);
? prudential regulations applicable to e-money issuers (2003);
? regulations on consolidated supervision of credit institutions (2003 – 2004);
? regulations on market risk management by credit institutions (2003 – 2004).
NATIONAL BANK OF ROMANIA
Regulatory Framework for Banks
Type
Prudential Regulation
Solvency Ratio
Liquidity indicator
12% (risk-weighted)
Actual liquidity ? Required
liquidity
Limits on lending (as % of own
funds)
• Credit concentration per
client
(group of connected clients)
• Insider lending
Limits on foreign exchange
exposure (as % of own funds)
Minimum registered capital
Loan classification and
provisioning
Audited annual reports
Comparison with EU
Standards
8% (risk-weighted)
No liquidity indicator
20%
25%
20% (aggregate)
20% (overall)
10% (any one currency)
ROL 250 billion (EUR 8.85 million)
0% for standard
5% for watch
20% for substandard
50% for doubtful
100% for loss
By audit companies
20%
2% excess multiplied by 8 to
get capital adequacy
EUR 5 million
No EU-wide standards
External comprehensive
audits
Source: NBR
NATIONAL BANK OF ROMANIA
Supervisory Agencies - Duties, Accountability,
Information Sharing and Autonomy
Supervisory
Agency
Licensing
Authority
National
Bank of
Romania
(NBR)
Yes for banks,
credit
cooperatives
and their
central
institutions
National
Securities
and
Exchanges
Commission
(NSEC)
Yes for
brokerage
companies,
investment
advisors,
investment
funds, stock
exchanges and
OTCs
Yes for
insurance,
reinsurance,
and insurancereinsurance
companies,
mutual
insurers and
insurance
brokers
Insurance
Supervision
Commission
(ISC)
Delicensing
authority
Same
Same
Same
Appointment and
Term of Head of
Agency
The Governor of
the NBR is
appointed by the
Parliament at the
recommendation
of its specialized
commissions.
Term: 6 years.
The president of
NSEC is
appointed by
Parliament at the
recommendation
of its specialized
commissions.
Term: 5 years.
President of ISC is
appointed by the
Parliament at the
recommendation
of its specialized
commissions.
Term: 5 years.
Accountability
of Head
Governor of
NBR is
accountable to
Parliament
MoUs with
How is the
Other
Agency
Agencies
Financed
Memorandum
The
of
resources
Understanding
are
with NSEC.
allocated
A draft MoU
from
with ISC was
NBR's
prepared.
budget
Regulatory
Autonomy
NBR is
entitled to
issue
secondary
legislation
President of
NSEC is
accountable to
Parliament
MoU with NBR
Fees
Same as
above
President is
accountable to
the Parliament
See above
Fees
Same as
above
NATIONAL BANK OF ROMANIA
STRUCTURE OF ROMANIAN BANKING
SYSTEM
as at March 31, 2002
Number
Commercial banks, of which:
Banks with majority state-owned
capital, of which:
?directly owned by the MPF
?directly owned by the AMPSO
Private-sector banks, of which:
?with majority domestic capital
?with majority foreign capital
Foreign branches
Total banking system
Percent in total net
assets
32
92.0
3
42.9
1
2
8.5
34.4
29
49.1
5
2.9
24
46.2
8
8.0
40
100.0
NATIONAL BANK OF ROMANIA
100
Share of Majority State-owned
Banks* in Total Banks
%
non-government credit
total assets
non-bank clients' deposits
90
80
70
60
50
40
30
20
10
Mar.02
Dec.01
Dec.00
Dec.99
Dec.98
Dec.91
0
share in total banks (%); March 2002
Total
assets
Nongovt.
credit
Non-bank
clients
deposits
Banks with
majority foreign
capital
54.4
65.1
52.2
Banks with
majority
domestic stateowned capital1
42.4
31.3
45.0
10.4
2.6
1) including CEC; 2) excluding BCR
11.0
Banks with
majority
domestic stateowned capital1,2
*) Banca Comerciala Româna (BCR), Banca de Export Import a României (EXIMBANK),
Casa de Economii si Consemnatiuni (CEC)
Note: Starting Sep. '99 BANCOREX was subject to merger with BCR; Except BANC POST and
Banca Româna pentru Dezvoltare (BRD) starting Feb. '99 and Banca Agricola (BA) starting Sep. '01.
Source: National Bank of Romania
NATIONAL BANK OF ROMANIA
Banking System Past Due and Doubtful Claims, Net
percent
percent
18
270
16
as share of total assets, net
14
as share of attracted and borrowed sources
12
as share of own capital (right-side scale)
240
210
180
10
150
8
120
6
90
4
60
2
30
0
Dec.98
Dec.99
Dec.00
Dec.01
Source: National Bank of Romania
NATIONAL BANK OF ROMANIA
0
Mar.02
Analysis Ratios for the Banking System
50
percent
40.7
38.7
40
39.7
28.8
30
40.4
past-due and
doubtful claims /
own capital
27.2
solvency ratio 1
(>12%)
11.8
leverage ratio
(tier 1 capital /
total assets)
23.8
20
17.9
12.1
10
8.6
7.6
overall risk ratio
0
December 1999
December 2000
December 2001
March 2002
Source: National Bank of Romania
NATIONAL BANK OF ROMANIA
Liberalisation of International Flows
1998: liberalisation of current account operations (Art.VIII of the IMF’s Articles of Agreement);
1999: liberalisation of medium- and long-term capital inflows
2001: schedule of capital account liberalisation
Liberalisation of
capital flows with
low impact on
balance of
payments
Liberalisation of
capital movements
consisting of
transfers in
performance of
insurance contracts
and other capital
flows with
significant impact
on the real sector
?direct
2001-02
2003
?admission
2004
Liberalisation of
capital flows with
significant impact
on the balance of
payments
and real-estate investment by residents abroad;
?admission to quotation of national securities* on foreign capital
markets
?collateral granted by foreigners to residents
?personal capital movements
?medium- and long-term loans related to commercial transactions or
services granted by residents to non-residents
?capital transfers in performance of insurance contracts
?collateral granted by residents to foreigners
?acquisition by residents of traded foreign securities* (including OTC)
?financial borrowings and loans with maturity less than 1 year
granted by foreigners to residents
?financial borrowings and loans granted by residents to foreigners
upon
accession
to EU
of foreign securities* to quotation on domestic capital
markets
?operations in ROL-denominated deposit accounts of foreigners
opened with resident financial institutions
?operations
in securities and other money-market specific
instruments
?operations in current and deposit accounts carried out by residents
with foreigners
*) including operations in units of collective investment undertakings
NATIONAL BANK OF ROMANIA
Foreign Trade with EU
USD billion
9
Exports fob
Imports cif
8
7
6
5
4
3
2
1
Source: National Institute of Statistics
NATIONAL BANK OF ROMANIA
2001
2000
1999
1998
1997
1996
1995
2001
2000
1999
1998
1997
1996
1995
0
Foreign Trade Composition by Currency
Exports
Imports
100%
other
currencies
80%
GBP
60%
40%
USD
20%
EUR
0%
1999
2000
2001
2002*
1999
Source: National Bank of Romania
NATIONAL BANK OF ROMANIA
2000
2001
2002*
*) March
NBR Forex Reserves Composition
100%
other
currencies
80%
60%
EUR
40%
20%
USD
0%
1999
2000
2001
2002 (May.16)
Source: National Bank of Romania
NATIONAL BANK OF ROMANIA
Nominal Exchange Rate
(Daily Data)
16,000
16,000
18,000
18,000
20,000
20,000
22,000
22,000
24,000
24,000
26,000
26,000
28,000
ROL/USD
28,000
30,000
ROL/EUR
30,000
32,000
ROL/basket of currencies
(60%EUR+40%USD)
32,000
34,000
Jan.00
Feb.00
Mar.00
Apr.00
May.00
Jun.00
Jul.00
Aug.00
Sep.00
Oct.00
Nov.00
Dec.00
Jan.01
Feb.01
Mar.01
Apr.01
May.01
Jun.01
Jul.01
Aug.01
Sep.01
Oct.01
Nov.01
Dec.01
Jan.02
Feb.02
Mar.02
Apr.02
May.02
34,000
Source: National Bank of Romania
NATIONAL BANK OF ROMANIA
Transactions on Interbank Forex Market by Currency
Purchases from clients
Sales to clients
100%
100%
Other
80%
80%
60%
60%
EUR
40%
40%
20%
20%
USD
0%
Source: National Bank of Romania
NATIONAL BANK OF ROMANIA
Jan.02
Jan.01
Jan.00
Jan.99
Jan.98
Jan.02
Jan.01
Jan.00
Jan.99
Jan.98
0%
External Debt by Currency
March 31, 2002
6.2%
54.0%
39.9%
USD
EURO
other
Source: National Bank of Romania
NATIONAL BANK OF ROMANIA