John Lipsky : the Romanian banking system must be vigilent to a possible contagionUpdated: 23-02-2010 | Financial and Banking

"The Romanian financial system must be vigilent to the threats in the system and to the possible effects of a contagion" John Lipsky, the first-deputy of the general manager of IMF said on Saturday.

According to information on the IMF site,John Lipsky chaired the meeting of the board which approved the money for Romania, worth 2.45 billion euro, within the loan of 12.9 billion euro contracted with the international financial institution.

"The budgetary deficit must be reduced to enter within the limits of the rate public debt/GDP necessary for Romania to enter the euro zone" John Lipsky showed, showing that " efforts are necessary to consolidate the macroeconomic stability and the implementation for sustainable development".

The target for budgetary deficit for 2010 keeps a balance between the economic growth which is weak and the objectives of consolidation on medium term, the first-deputy of the manager general of IMF said.

"However, the adjustment strategy involves difficult decisions from the politic point of view as regards public expenditure and requires a strict putting to value. The authorities are prepared to take supplementary measures,if necessary, to reach the fiscal objectives."

Supplementary measures are essential for fiscal control, pensions reform, the sytem of state employees and the public system of payment, as well as the improvement of the public system efficiency, John Lipsky underlined.

"The regime of inflation targeting and of the floating exchange rate led to the diminution of the crisis impact and meant an anchor for monetary policies. In 2010, the central bank will offer a priority to bringing the inflation back within the limits and will impose a careful approach for monetary relaxation. The Romanian financial system must be vigilant to threats in the system and to possible effects of contagion" John Lipsky added.