FRSGlobal : Risk Analysis and Regulatory Reporting

Regulators in Romania

The supervisory and regulatory framework in Romania consists of:

• National Bank of Romania (BNR)

FRSGlobal in Romania

Romania has been one of the most dynamic economies of eastern Europe. The country is the member of European Union since 2007.

The Romanian banking sector is organized into a two Tier system (which includes both supervisory and executive structures) with the National Bank acting as an independent and autonomous central bank.

Recent global turmoil created an adverse effect on the country’s economic growth. But due to state owned enterprises and lower debt ratio, the economy is showing signs of recovery and is on the path towards stable economic growth.

To avert possible shocks in future, the government is backing up economy with several reforms in terms of robust exports and high domestic demands.

Also the central bank is taking proactive measures such as tightening lending standards to minimise the effect of debt crisis which otherwise may hamper economic growth of the country.

According to recent IMF reports, banks in Romania are well-capitalized and have adequate amount of liquidity. Although non performing loans are increasing, they are at a slower pace.

The challenges ahead for the banking industry in Romania lie in improving bank asset quality, maintaining liquidity position and managing credit risk.

Regulatory Environment — Romania

Statutory

Financial reporting
FINREP developed by European Banking Authority (formerly CEBS), has been partially implemented in Romania since 2006. The National Bank of Romania (BNR) has adopted FINREP both on a consolidated and solo basis, for collecting financial information in order to perform the ongoing supervision. Consolidated reporting is in accordance with IFRS norms, while individual financial statements of all Romanian credit institutions are in accordance with European Directives. Additional quarterly reports on guaranteed deposits and loans commitments are also required to submit to the BNR.

Prudential

Capital adequacy reporting
Capital adequacy reporting in Romania is based on COREP framework designed by European Banking Authority (formerly CEBS). Credit institutions are required to submit standard COREP reports on solo and consolidated basis. On individual basis, these reports are required to be submitted quarterly except for the own funds indicator in CA template which is to be submitted monthly while on consolidated basis these reports are to be submitted semi-annually.

Large exposures reporting
Any exposure exceeding the threshold limit of more than 10 percent of net capital are considered as large exposures and are required to be reported to the National Bank of Romania. These reports are submitted on quarterly basis.

Liquidity risk reporting
Liquidity risk reporting is concerned with providing information on flow of liquidity and liquidity ratios. It includes reports such as distribution of assets and liabilities, distribution of maturities categorized by off balance sheet items such as loan commitments, liquidity position, high liquidity risk transactions etc. to be submitted to the BNR on monthly basis.

Statistical

Monetary Financial Institutions (MFI) statistics
MFI statistics are collected as per requirements from ECB. The Central bank collects statistical data from credit institutions for supervisory purposes and submits it to the ECB on periodic basis. The reports include information on balance sheet and interest rate to be submitted on monthly basis.

Interbank deposits reporting
All the credit institutions are required to submit the information on interbank deposits with other credit institutions, to the Central Bank on monthly basis. These reports are collected to monitor and track large deposit amounts and largest depositors.

Transactional

Daily transactions reporting
All the banks authorized by the National Bank of Romania acting as foreign exchange interbank are required to submit daily reports on interbank foreign exchange transactions and all the transactions related to currency options and swaps. In addition, Banks are also required to submit the information on interbank assets and liabilities and transactions related to derivatives with underlying interest rate.

Balance of Payment reporting
BoP reporting is concerned with information on all the transaction between Romania residents and non residents. It includes reports on external payments, foreign cash transactions, non monetary transactions, deposits and receipts from non residents etc. to be submitted on monthly basis. .