BNR Governor: Banking system is solid but liquidity not uniformly distributed among banks

* Romania’s Central Bank carefully follows developments in the Greek and Austrian banking systems


The Romanian banking system is solid from the point of view of solvency and liquidity, however liquidity is not uniformly distributed among Romanian banks, so some of them prefer to borrow from the National Bank, BNR Governor Mugur Isarescu stated.

“There continues to be sufficient liquidity on the market, but it’s not uniformly distributed, it is distributed to several banks. (…) When I analyzed the market on Monday I noticed that there were banks that, having limited access to obtaining liquidity on the market, informed us that they would prefer to borrow from the National Bank at the weekly tenders because they did not have access to the market,” Isarescu explained at the press briefing that followed the Board’s monetary policy meeting.

In relation to the context of the situations in Greece and Austria, Isarescu added that liquidity can fall in conditions of tensions and distrust.

“We have enhanced our focus on Austria and Greece because these are the countries that have contributed the biggest share of capital invested in the Romanian banking system. The situation can be depicted in this way: we have Romanian banks with foreign capital, and the dependence on what is going on in the two countries is not direct, but, through investors, the parent banks, the indirect influence can be important,” the BNR Governor underscored, adding that one also has to bear in mind the psychological impact too, and also the way in which dependence on the parent banks is perceived.

Isarescu concluded by pointing out that the Central Bank is not only following very carefully what is going on in the two countries but is also ready “for any kind of scenario.”


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