European banks commit to Romania: EU, IMF

BRUSSELS, Aug 10, 2009 (AFP) - The European parent banks of the nine largest foreign-owned banks in Romania have all committed to maintaining a solid presence in the crisis-hit country, the EU and IMF said Monday.

The banks concerned -- including Eurobank, National Bank of Greece, Societe Generale, Volksbank and UniCredit Group -- represent 70 percent of Romania's banking market and are therefore key to the EU nation's financial recovery.

The foreign-owned banks have now signed commitments to maintain a relatively strong capital to risk ratio to help firm up the country's financial system, the European Union and International Monetary Fund said in a joint statement.

"The success of Romania’s macroeconomic reform program and the sustainability of its balance of payments depend significantly on the continued active involvement of foreign banks in Romania," the IMF and EU said.

Earlier this year there was a high level of concern among some ratings agencies and other observers that there could be a new twist to the global economic crisis coming from misfiring banks in Eastern and Central Europe.

Romania's credit ratings were particularly under threat amid fears that foreign banks would give up on their investments in financial institutions in the region. Agreements like this have helped to ease those fears.

Under the agreement signed on Monday the parent banks will boost the capital of their subsidiaries "to maintain a 10 percent capital adequacy ratio," the EU and IMF said in their statement.

Romania has already been granted a 20-billion euro (28-billion-dollar) joint loan from the IMF the EU the World Bank and the European Bank for Reconstruction and Development.

Source: AFP

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