IMF's testing schedule imposed for banks

Publish date: 27-04-2009
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Commercial banks that could drop below the 10 percent solvency threshold, following a stress test required by the International Monetary Fund (IMF), will be compelled to increase their capital by September, according to the letter of intent signed by Romania's government and the IMF for a €12.95 billion loan, according to government sources for Business Standard.

Banks that committed to maintain exposure on Romania during a meeting with IMF officials last February must increase capital whenever necessary during the two years of the IMF agreement. The National Bank of Romania (BNR) has already carried out a stress test for banks, based on data available on 31 December 2008. According to banking sources quoted by the Cotidianul daily, the global amount needed for the capitalization of lenders is set at €900 million.

"Several hundred million [Ed. n. euro] have already been released by the shareholders of bank," sources said. BNR committed to finalize the stress test agreed upon with IMF by April 30. Alternatives include in the letter of intent for the capitalization of banks are a share capital increase, financing lines from mother-banks for at least five months, or loans from international financial institutions. By the end of 2008, the average solvency index amounted to 12.34 percent, lower year-on-year. The central bank recently recommended that seven banks maintain solvency above 10 percent. The legal minimum allowed solvency index is 8 percent.

Business Standard

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