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June 23, 2021

Cross-border loans to Romania down almost USD 10 bln since 2009

The volume of cross-border loans extended to the Romanian economy dropped by USD 3.8 bln in Q4 2011, to USD 52.8 bln, which is nearly USD 10 bln (15 pc) less than at the end of 2009, according to data released by the Bank for International Settlements (BIS) and quoted by Mediafax. Cross-border lending to the Romanian non-bank sector declined by more than USD 7 bln during the last two years, from USD 27.2 bln in 2009 to USD 20.1 bln at December 31, 2011. During the last quarter of last year, the decline reached USD 1.87 bln, from USD 21.9 bln at September 30. Cross-border lending to Romania-based entities thus decreased from USD 56.7 bln at the end of September to USD 52.8 bln at the end of last year, representing a decline by USD 3.8 bln, or 6.7 pc. From an average level of USD 62.2 bln at the end of 2009, the decline amounted to USD 9.4 bln, or 15 pc.The data refer to economic activities financed from abroad, including loans extended by foreign banks to companies, banks and state institutions, bonds and the financing of the local subsidiaries of foreign financial institutions.At global scale, cross-border crediting registered in Q4 2011 the most severe decline rate after the last three months of 2008, when credit markets froze after the Lehman Brothers bankruptcy. Inter-bank crediting registered the most significant decline rates, especially in the case of euro zone banks, hit by the crisis of sovereign loans and by the need to curb the risk to the levels provided by the new international bank regulations. Foreign banks’ exposure on Romania, which include locally financed assets, decreased last year by 5.4 pc, or USD 6.1 bln, to USD 107 bln, according to the data released by BIS. In the case of European banks, the exposure on Romania dropped in 2011 by 5.7 pc, or USD 6.2 bln, to USD 102.5 bln.

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