Cristian Popa, vicegovernor of the BNR or National Bank of Romania, tried on Thursday to explain that Austria’s new rules would target new loans, not the existing stock and that most of the exposure is accounted for by the subscribed and paid up capital, which cannot be repatriated. So the 110% loan/deposit ratio of Austrian banks’ regional subsidiaries will be required only for new loans.
“This is not about the existing stock, a potential reduction in existing amounts, it is about the speed of flows. It is not about capital, it’s about financing, liquidity. There is the risk of financing rising at a much slower pace,” said the National Bank official.
Rasvan Radu, executive president of UniCredit Tiriac Bank, says it is out of the question for the new rules to target the refinancing of the existing stock of loans and that there will not be withdrawals of the existing lines of financing.
The interpretation is complicated by the fact that the Austrian central bank has not clarified the methodology based on which the loan/deposit ratio will be calculated, and after the announcement on Monday evening, no additional details were given.
The executive president of BCR, Dominic Bruynseels, says he is expecting the Austrian regulatory authority to give “precise guidelines” as to what is desired in terms of the financing lines.
As regards the impact on Romania, Bruynseels says individuals will not be affected at all, with the main effect of the capping of exposure to be visible in Romania’s growth rate and in large companies.
Steven van Groningen, head of Raiffeisen Bank Romania, says this would only be “an idea” and that the parent bank has not sent him any guidelines on the subject.
“I am now in talks in our central trying to understand exactly what the impact could be. I suppose it regards a portfolio of countries, but it doesn’t say anywhere it applies to each particular country.”
The Bank of Austria has on Thursday confined itself to reiterate that it only wants to make the business model of Austrian banks in the region more sustainable.
(English version by Daniela Stoican)