Adrian Vasilescu, adviser to National Bank of Romania (BNR) Governor Mugur Isarescu, explained on Tuesday evening that the leader of the BNR cannot comply with the invitation extended by Finance Minister Eugen Teodorovici, because the latter did not go through the legal procedure.
“It’s been said today that the RON has depreciated because it felt or was impacted by what happened yesterday (Tuesday – editor’s note) at the National Bank. Well, what did happen yesterday at the National Bank? The Governor did what he has been doing since September 1990. Every time risks that could change the balance in what concerns financial stability appear, the Governor comes out and talks publicly about it. That’s what he did yesterday too: he came out and publicly expressed his point of view,” Adrian Vasilescu stated for Digi24.
On Wednesday, the RON registered the lowest level against the EUR: RON 4.6722. Some analysts claimed it was a reaction to the fact that, during a press briefing on Tuesday, BNR Governor Mugur Isarescu called the tax on the banks’ financial assets a foolish act and “an invention,” considering that it is set based on the ROBOR index.
The BNR Governor’s adviser went on to explain the reasons why the Governor cannot go to the Finance Ministry. On Sunday evening, in a talk-show on Antena3, Finance Minister Teodorovici stated that he will invite the BNR Governor at the ministry in order to talk about the Romanian banking system.
“Now the Finance Minister says: ‘I’ll summon him, for him to give me answers.’ It’s not possible. There’s a legal framework and this framework is called the National Macroprudential Committee (National Committee for Macroprudential Oversight, CNSM – editor’s note). This committee is legally bound to carry out an analysis on all the dangers to financial stability. These dangers are put to the vote within this committee, are sent to the Government and the Government is obligated, also by law, to respond to this notification,” Vasilescu pointed out.
If the Government believes the CNSM’s notifications are not correct, they cannot “throw it in the garbage bin,” the adviser to the BNR Governor added.
“They are obligated, by law, to respond publicly and to say what are the reasons for not complying with the notification of the National Macrostability Committee. It’s a law that is of European origin. It’s a law that is in force in all 28 countries of the European Union and in all 28 countries of the European Union the Governments are obligated to listen, to take note of these notifications, to analyse them and, if they believe they are not correct, to publicly respond and say why they are not correct,” Vasilescu explained.
The BNR Governor and the Finance Minister are members of this Committee, alongside seven other members who represent the BNR, the Finance Ministry and the Financial Supervisory Authority (ASF).
“This Committee must discuss the problem that has been created. It’s a systemic risk problem. A systemic risk problem cannot just go away… The Governor spoke colloquially yesterday: we can’t discuss this on television, it’s a problem that we must discuss in the legal framework. This is the only legal framework for such a discussion, there is no other. Of course, the Finance Minister could invite the Governor at the Finance Ministry, with the amendment that he too had been at the National Bank. This invitation did not sound friendly at all, it sounded like an ultimatum, and I believe the Government doesn’t have the right to comply with such an ultimatum-like invitation,” Vasilescu concluded.
In fact, during his briefing on Tuesday, the BNR Governor claimed that he did not receive an official invitation from the Finance Ministry to discuss about banks and that there is no legal framework for such an invitation. Moreover, in his capacity as Chairman of the CNSM, the BNR Governor is mulling convening a special meeting of the Committee in order to talk about the adoption of the tax on banks’ financial assets and about the Romanian banking system.