National Bank of Romania (BNR) Deputy Governor Liviu Voinea publicly revealed the list of Romanian banks of systemic importance, at the EU-COFILE 2015 conference organized by BNR along with the Romanian Banking Association (ARB) and Alpha Bank.
The banks are identified periodically, on the basis of European Parliament’s and European Council’s Directive 2013/36/EU adopted on June 26, 2013, a directive that concerns access to the activity of banking institutions and the precautionary supervision of banks and investment companies. These provisions were included in BNR Regulations no.5/2013 concerning precautionary requirements for banking institutions, using the methodology published by the European Banking Authority. The implementation of the aforementioned methodology in June 2015 led to the identification of the following banks as having systemic importance: nine subsidiaries (Banca Comerciala Romana, BRD – Groupe Societe Generale, UniCredit Bank, Raiffeisen Bank, Banca Transilvania, AlphaBank, Garanti Bank, CEC Bank, Bancpost) and one branch (ING Bank N.V., Amsterdam). The banks of systemic importance play a significant role in the Romanian banking system, owning 72 per cent of its assets, 75 per cent of its deposits and 73 per cent of its loans (in June 2015).
“Identifying the banks of systemic importance is part of the Romanian banking system’s process of convergence toward an integrated European banking system,” Deputy Governor Liviu Voinea stated.
According to the definition included in the directive, a systemically-important bank is “a bank whose bankruptcy or improper functioning could trigger systemic risk.” In case of problems, these banks are automatically subjected to settlement and bail-in mechanisms.
In case of a bank’s bankruptcy, as part of the settlement mechanisms its shareholders are the first to bear the costs and only then the other categories of participants (for instance depositors with over EUR 100,000 in the bank), and the states have this option but are not forced to cover bail-in costs.
A supplementary capital requirement is also introduced, representing 1-2 percentage points, however Romanian banks have high capitalization (so they do not need supplementary capital).