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May 15, 2021

Fitch now overcautious about Romania, Isarescu says

Central Bank Governor Mugur Isarescu said Friday, during a conference on the monetary policy rate, that the rating agency Fitch now is over-cautious when it comes to Romania. “It trusted us once and… I’d rather not say! Reading their communique one notices that there are two reasons for concern: the credibility of the country and of policies – also the internal political stability – and the reversibility of policies. This validation by the IMF in two revision of the programme with Romania, by validating the steps we still must make – which stresses what we have to do rather than what we did – is something very important. Because this is not about credibility alone, also low interests on the market and savings from budgetary expenses,” Governor Isarescu said Friday. “You noticed a contradiction – very small margins and a not good enough score from rating agencies. And this is not the only contradiction,” Isarescu added, quoted by HotNews.ro.
In a different move, Isarescu does not believe that the replacement of Misu Negritoiu from the position of CEO of ING Bank Romania was related to the agreement signed by the Dutch group with the US authorities with regard to the operations with Iran conducted via Romania, but he will inquire about this matter. “Of course I am informed. Such information comes especially from the Supervisory Department and is relayed to the Money Laundering Prevention and Combatting Office. This also happens to much bigger houses. I do not jump and turn the back to this issue, it is an issue indeed, but let’s put it in perspective, this is what I want to say. (…) Let’s not overreact,” Isarescu mentioned, when asked if he knew about the involvement of ING Bank Romania, while Misu Negritoiu was CEO of the branch, in illegal transactions with Iran that got several bank employees sanctioned and the bank signed an agreement with American authorities and paid a fine in excess of USD 600 M. At mid-2012, ING Group accepted to pay USD 619 M for the closing of an investigation in the USA on the rigging of financial records in view of avoiding the sanctions applied to states like Cuba and Iran. At that time, US authorities announced that the operations with Iran were conducted through the Romanian branch of the bank.
“No, I was not aware of this, nor do I believe that things have changed… His term ended and he was promoted to a nobler position. (…) If we judge it this way, if we are so harsh on ourselves, we have many reputation risks,” Isarescu said, answering insistent journalists who asked if the replacement of Negritoiu was related to this situation, as other employees were sanctioned, some even lost their jobs during that period of time.

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