“The banking system is solid and well capitalized. Neither the population, nor the companies have reasons to worry,” said Georgescu, also a deputy prime minister in Romania’s government, during a news conference. He added that the authorities are constantly monitoring the external evolutions, the capital flows in and out of Romania, as well as the status of the local banks.
Political turmoil in Greece escalated earlier this week after local parties were unable to form a new government following early elections May 6, which triggered preparations for a new round of elections. The situation had markets worrying that the Hellenic nation might not move forward with painfully austere measures aimed to reduce the country’s huge budget deficit and avoid a default.
The Romanian subsidiaries of Greek banks have combined assets equal to around 17% of the overall local assets.
According to data from the bank for International Settlements, Greek banks’ exposure to Romania fell 11% on the year to $18.8 billion in 2011.
The overall exposure of foreign banks slid 5.4% to $107 billion at the end of December.
Early January, the Romanian government approved the legal framework allowing the central bank to create a bridge bank that would manage and insulate financially troubled lenders.
The bridge bank will be financed by the central bank’s deposit guarantee fund and will be empowered to take over assets and liabilities of any insolvent bank for a period of up to two years or until ownership cane transferred to a suitable investor.