A total of EUR40 billion have been withdrawn from Greek banks in Greece since the beginning of the year, that is one quarter of the total. Five billion euros in deposits were withdrawn last week alone. The meetings of euro zone finance ministers and heads of state on Monday might be the only chance for Greece to reach an agreement with its lenders to avoid a default that might push the country’s banking system into collapse.
Market sources say a number of meetings about the situation in Greece were held at Romania’s central bank at the end of last week.
Greek banks manage more than 40 billion lei (almost EUR9 billion) assets in Romania, and hold RON24 billion in consumer and corporate deposits. Deposit holders withdrew more than RON1.5 billion from local Greek-held banks in the first quarter.
Romania’s central bank (BNR) says the Bucharest subsidiaries of Greek banks are well capitalized and have enough cash to cope with a potential massive deposit withdrawal effortlessly. The solvency ratio of the Greek-held banks stands at 17%, while the minimum required by the central bank is 10%.
“BNR may intervene even with this good solvency ratio. If Greece introduces capital controls and local subsidiaries can no longer draw money from their parent banks there, we can enforce the netting agreements. There is no need for cash for the time being,” Nicolae Cinteza, head of the supervision department of Romania’s central bank, told ZF.
He says that about 10% of the asset portfolios of Greek bank subsidiaries are Romanian government paper, which allows them to turn to Romania’s central bank as a lender of last resort.
The central bank recommended Greek bank subsidiaries in Romania to sign netting agreements with their shareholders to prevent them from withdrawing local deposits in case Greece introduces capital controls.
The central bank is even willing to go as far as to withdraw the voting rights of the Greek shareholders if they are unable to support their subsidiaries in Bucharest.
(English version by Loredana Fratila-Cristescu)