As Greek banks can’t fund and its subsidiaries also can’t, the Romanian/Bulgarian sovereign suddenly finds itself in bank rescue territory, according to a report from the Japanese bank Nomura, quoted by Mediafax. Currently, Romanian bank subsidiaries (in Romania particularly given the relative liquidity availability, but also in Bulgaria to a lesser extent) have been funding their parent companies in the local market. Since April last year Greek bank funding costs have been higher in their own domestic market than in Romania. This amount of borrowing has partly been behind RONs relative strength (or to be more exact BNR has used such outflows as a method of strengthening the currency through relaxed currency policy control) as well as draining liquidity from the local market at a time when rates were already rising. Romanian and Bulgarian subsidiaries of Greek banks are pretty well capitalised (which is one reason for the sovereign CDS not to move) but largely that’s because their parent institutions supported their subsidiaries under the original Vienna Initiative, in 2009, the report notes.