21 Mai 2009
Lazea: NBR may force banks to change their corporate governance
BNR may impose recapitalizations in banks or changes in their corporate governance if needed, but there is no systemic risk on sight, said the senior economist of NBR, Valentin Lazea
“There are no systemic risks likely to emerge. If needed, the National Bank will adopt measures on a case-by-case basis, such as forced recapitalizations and/or changes in the corporate governance. These interventions will surely not be funded from public finance”, said Lazea, adding that his statements don’t reflect the official position of the central bank.
The large equity positions held by foreign companies in a banking system is seen as a disadvantage, although primarily it was deemed as a good sign, he continued.
“Romania ranks fourth of 11 central and east-European countries in this matter. A large equity position governed by a foreign company can turn into a disadvantage only if the external banking debt covers a big portion of gross domestic product and it can be rapidly withdrawn if the loan in foreign exchange is dominant and bears a high default probability”, Lazea explained.
The large equity positions held by foreign companies in a banking system is seen as a disadvantage, although primarily it was deemed as a good sign, he continued.
“Romania ranks fourth of 11 central and east-European countries in this matter. A large equity position governed by a foreign company can turn into a disadvantage only if the external banking debt covers a big portion of gross domestic product and it can be rapidly withdrawn if the loan in foreign exchange is dominant and bears a high default probability”, Lazea explained.