The National Macroprudential Supervisory Committee’s role is to issue recommendations that the Government is forced to take into consideration, but not necessarily to implement, Finance Minister Eugen Teodorovici stated.
“It’s a committee that issues recommendations that the government or the other state structures are normally forced to take into consideration but not necessarily to implement. The law clearly stipulates that if these recommendations cannot be implemented then why they cannot be implemented is explained and that is the government’s decision. That goes for the Fiscal Council too, which issues an opinion which the government is forced to take into account, but not to implement. If I have arguments that clearly show that there is no need to implement what this Council issues as a recommendation, it won’t be applied,” the minister explained on Antena 3 on Saturday evening.
Teodorovici also stated that all the other EU member states have already informed the European Commission about “the manner in which they have set up such structures at national level, Romania being maybe the last country that had to do this.”
The government approved on July 22 the setting up of the National Macroprudential Supervisory Committee, a body that will supervise the national financial system. The BNR Governor will be its president.
According to the approved draft law, the National Macroprudential Supervisory Committee will consist of representatives from the National Bank of Romania (BNR), the Financial Supervisory Authority, and the Government, and will function as a structure for inter-institutional cooperation, lacking juridical personality, whose role will be to ensure the coordination of macroprudential supervision at national level.
The BNR Governor will be the president of the Committee, which will consist of nine members: the Governor, BNR’s First Deputy Governor, BNR’s two Deputy Governors and BNR’s Chief Economist, the President and First Vice President of the Financial Supervisory Authority and two Government representatives appointed by the Prime Minister.
The members of the General Council will not be paid for their activity. The goal of the Committee is to contribute to the defence of financial stability, including by consolidating the financial system’s capacity to withstand shocks and by lowering the accumulation of systemic risks, ensuring the financial system’s sustainable contribution to economic growth. When fulfilling their goal, the Committee and the members of its General Council will not ask for and will not accept instructions from any authority, institution, public or private body.
The Committee’s main prerogatives are: devising the macroprudential policy strategy, collecting and analysing information, as well as identifying, monitoring and analyzing systemic risks toward financial stability, identifying the systemically relevant financial system institutions and structures, issuing recommendations and warnings in order to prevent or ease systemic risks endangering the stability of the national financial system, and monitoring their implementation etc.
The recipients of the Committee’s recommendations will be the National Bank of Romania (BNR), the Financial Supervisory Authority (ASF) and the Romanian Government. After receiving such recommendations and warnings, the aforementioned recipients have the obligation, according to the draft law, to adopt the measures recommended or to take action in order to diminish the risks they were warned about, including by issuing regulations.
Bogdan Olteanu: “The recipient has the obligation to implement the recommendation”
BNR Deputy Governor Bogdan Olteanu stated that the Committee will not be a kind of “Big Brother” for the Government. In this sense, Olteanu explained that this is a Committee that makes recommendations and asks for explanations in case the recommendations are refused. In brief, the Committee will make dialogue and responsibility mandatory.
“The National Committee does not make recommendations for Parliament or the Romanian President. It issues recommendations or warnings to its members – the BNR and ASF –, recommendations to the Government. The carrying-out, implementation of these recommendations is not mandatory. The recipient has the obligation to implement the recommendation or to explain why he won’t do so. BNR does not have the majority within the Committee,” Bogdan Olteanu stated for Realitatea TV.
Asked whether Mugur Isarescu, President of this Committee, will not automatically have authority over the Government, Bogdan Olteanu explained: “Oh, yes, the Prime Minister will say he took note and will implement it or state why he won’t. He will be someone who will hold you accountable.”
Sorin Rosca Stanescu: “This National Committee will replace the Gov’t to a great extent”
Former Senator and journalist Sorin Rosca Stanescu claims that this Committee is “a ticking time bomb” that was in fact set up by President Klaus Iohannis. According to him, the effect of this project is multiple. A significant part of power’s playing field will fall under the authority of the Presidential Palace, and the Government will lose one of its most important prerogatives.
“At an extremely delicate moment which has basically frozen relations between the President and the Government – the moment the Fiscal Code has been sent back to Parliament – a bomb with devastating effects is somehow hurled from out of nowhere. This draft law for the setting up of a hyper-body. Which has authority over the Government. Independent of the Government. Which can attack almost any Government decision – because almost any decision can be interpreted as having effects on macrostability – and can issue recommendations that are mandatory for the Government. This National Committee will thus replace the Government to a great extent. By basically taking over its prerogatives. Moreover, the control exercised by Parliament in that domain will become superfluous. So Parliament will have fewer prerogatives too,” Sorin Rosca Stanescu writes in a comment for stiripesurse.ro. “And what is this National Committee? It is, no more and no less than the Governor of the National Bank. Mr. Mugur Isarescu. Why? Because the decisions are taken by nine members. Five of those nine, in other words always the majority, are BNR representatives. Namely the Governor, First Deputy Governor, two Deputy Governors and BNR’s Chief Economist. Few know that based on how it operates the BNR is the copy of a militarized system. Without a doubt, the commander takes the decisions. Namely the Governor,” Sorin Rosca Stanescu warns, stating that “a new binomial” – President-Governor – is thus being formed. “If the project succeeds, this binomial will basically rule Romania. The Government will become an instrument of implementation,” the journalist added.
“There certainly is an agreement, reached both within and without the country, between the Romanian President and the BNR Governor. If I am right then at least from this point of view Mr. Mugur Isarescu becomes, no more and no less than President Klaus Iohannis’s instrument,” Sorin Rosca Stanescu wrote in his comment.
Liviu Drangea: “I don’t believe it can function”
PSD Interim President Liviu Dragnea stated that he does not believe the draft law that entails the setting up of the National Macroprudential Supervisory Committee will work, arguing he finds it a serious thing for the members of this body to take overall decisions concerning the national financial system.
“I didn’t know anything about this. What am I to understand, that there no longer is a Government, a Parliament, the Presidency? I do not think such a thing can function. I will look into it, it seems to me a very serious thing. It is unacceptable that nine people, no matter how good or how well-meaning they are, should decide everything, above the Government, above the Parliament,” Dragnea stated for Antena 3.
Traian Basescu: “It can’t have prerogatives that are not in line with the Constitution”
The National Macroprudential Supervisory Committee does not have supragovernmental prerogatives, being merely consultative, Traian Basescu believes. The former president pointed out that the Committee cannot have prerogatives that are not in line with the Constitution.
“It does not have supragovernmental prerogatives and those who wrote the prerogatives have to take a look at EU recommendations for this body to be merely consultative. It cannot have prerogatives that are not in line with the Constitution, meaning it cannot be bigger than the Government, more important than the President,” Traian Basescu stated for b1.ro.