Republic of Romania : Financial Sector Assessment
This financial sector assessment (FSA) summarizes the key findings and recommendations of the 2008 FSAP update report for Romania. The main findings of the FSAP update are: the financial system entered the crisis well capitalized and with high liqu...
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| Format: | Financial Sector Assessment Program (FSAP) |
| Language: | English en_US |
| Published: |
Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2009/06/19062511/romania-financial-sector-assessment http://hdl.handle.net/10986/17354 |
| Summary: | This financial sector assessment (FSA)
summarizes the key findings and recommendations of the 2008
FSAP update report for Romania. The main findings of the
FSAP update are: the financial system entered the crisis
well capitalized and with high liquidity buffers, and the
four financial sector regulatory authorities have made
significant progress in adopting international best
practice, including through transposition of European Union
(EU) directives, and implementation of many of the
recommendations of the 2003 FSAP. While the banking system
is currently well capitalized, the rapid deterioration in
economic conditions and the depreciation of the leu may put
strains on bank capital. The measures to strengthen the
system are needed: an ex ante strengthening of capital
positions is warranted; the overall exposure of foreign
parent banks to Romania should be maintained; banks need to
develop effective debt restructuring or workout procedures
for household and corporate clients; crisis management
coordination should be accelerated; bank resolution powers
strengthened; and deposit insurance funding and payout
arrangements improved. Some cross-sectoral themes emerge to
strengthen the supervisory frameworks, including the need to
strengthen the political independence and financial autonomy
of the non-bank financial regulators; better cross-sectoral
cooperation in supervision of financial groups; further
movement toward a more risk-based approach to supervision;
better consistency in valuation rules for market
instruments; adoption of international financial reporting
standards (IFRS) accounting; and in the banking sector,
strengthening of the basel two implementation framework.
Longer term developmental issues include the need to address
obstacles to capital market development, certain risks in
insurance, and to ensure sustainability of the pension
system reform. |
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