Romania ready to help local Greek lenders
Romania’s central bank has a plan to aid the units of Greek banks operating in the country, in case the deepening debt crisis in the Mediterranean country shuts down funding flows from the parent lenders, First Deputy Governor Florin Georgescu said.
“In case one of the Greek owners shows it doesn’t have the ability to financially support its unit in Romania, we can apply these measures gradually, in the appropriate dosage, which is not the case now,’’ Georgescu told reporters in Bucharest yesterday.
“We don’t have the obligation to act preventively, under the law, and we have a plan to react, if needed, which includes certain measures,’’ he said, without providing further details.
The Eastern European country’s Banca Nationala a Romaniei is monitoring Greek-owned banks on a weekly basis because they control about 17 percent of the Romanian banking industry.
The Greek banks’ Romanian units, including Alpha Bank, Eurobank EFG and National Bank of Greece (NBG), are “well capitalized’’ at this point and have a solvency ratio of 15.7 percent, one percentage point above the banking sector’s average, Georgescu also said.
Romania’s banking industry is dominated by Austrian lenders, which control about 38 percent of the market, followed by Greek banks and French lenders with 15 percent.
Meanwhile, Standard & Poor’s cut its long-term credit rating yesterday on United Bulgarian Bank (UBB) to B-from B, after parent company NBG was downgraded. “The continued weakening of NBG’s creditworthiness raises the risk of contagion for UBB, in terms of reputation and funding, particularly in the confidence-sensitive wholesale markets,” S&P said in a statement.