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August 17, 2022

Tanasescu: The banking union leads to an increased discipline of the system

The banking union is a necessary exercise for Europe, the vice-president of the European Investment Bank (EIB), Mihai Tanasescu said in an interview with bursa.ro.
“The banking union is the result of an older European initiative. It has the role of bringing order, discipline and coordination at the level of the European banking system. It also results in the attitude of banks being not so different. (…) It certainly is a desideratum which Europe must successfully finalise in the coming years,” Tanasescu stated. Asked if the Romanian financial-banking system is better capitalised than that of Cyprus, against the background of founding the banking union, the EIB official answered: “I can tell you, in all responsibility, that the Romanian banking system is very sound and very well capitalised. A stress-test was conducted, regarding the possibility of a 20 pc devaluation of the national currency, and it proved that the Romanian banking system would resist and would remain with a strong capital rate at the level of the whole country, even in this situation.” He went on: “It is clear that the Romanian banking system is sound and we must trust it. One should also not ignore that the banking system, like everywhere in the world, is in a continuous transformation; some banks go, others come. It is precisely this transformation that makes the system be solid. Furthermore, it is among the best supervised in Europe, and this element of supervision is not only an internal one, but also – as we say – a >, a supervisory system at regional, at international scale.”
The EIB vice-president also emphasised that, despite the opinions of some analysts, who believe that Romania signed its “sentence” once it signed a new agreement with the International Monetary Fund (IMF), such a partnership is more than necessary. “(…) Having a partnership with the IMF does not mean a sentence, but a stability anchor in the case of economic turbulences at global scale. But if or without the IMF, Romania must continue its structural reforms,” Tanasescu underscored. According to the same expert, there are two aspects that make the accord with the IMF necessary: “First, the stabilisation of the economy, which exists now, but must be consolidated. Second, a partnership with the EC and IMF is a defence against an unforeseen shock that might appear from where it less expected,” the EIB vice-president added.
In a different move, Tanasescu added that EIB considers several important operations in Romania, both in the public and private segments. “We believe that, during November-December, we will grant a rather important loan for rural development and, probably, we will continue the talks with banks, over new loans. This year, on the banking segment, we will reach approximately EUR 200-250 M. Next year we target a cooperation of approximately EUR 300-350 M with the credit institutions in Romania,” the EIB official mentioned.

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