Lack of executives prevents CEC from making managerial decisions

The executive management of Casa de Economii si Consemnatiuni (Romanian Savings Bank-CEC), in charge of the everyday activity of the institution is currently facing the impossibility of making managerial decisions, as it does not have enough members.

Of the four executive management members, appointed by the former Prime Minister Mugur Isarescu in June last year, while the FNI crisis was in full swing, only two are still heading CEC – the chairman Ion Ghica, and one of the vice-presidents – Niculae Balan, at the moment.

The other two vice-presidents, Enache Jiru and Rasvan Radu have quit CEC management in the mean time, settling for high-level positions in other financial institutions. Enache Jiru was appointed director general of the Treasury of the State in February, while Rasvan Radu has been recently elected vice-president of Raiffeisen-Banca Agricola and is to come in office on August 1, 2001.

“I think the Finance Ministry, the only shareholder of CEC, will solve this problem with the Government’s help as soon as possible, because they are fully aware that major decisions to ensure the smooth running of an institution cannot be made by two people,” Ion Ghica, CEC chairman told Ziarul Financiar.

CEC’s chairman and vice-presidents are appointed by the Prime Minister. The other seven members of the Board of Directors are appointed by the Finance Minister. The State, represented by the Finance Ministry is CEC’s only shareholder.

The executive board, that is the executive management, is in charge of the institution between two meetings of the Board of Directors. The decisions of the executive board, comprised of one chairman and three vice-presidents have to be made by absolute majority.

Casa de Economii si Consemnatiuni is the last of the state-owned banking institutions, where no changes in the management have been made after the Party of Social Democracy (PDSR) came in power.

Casa de Economii si Consemnatiuni is currently undergoing restructuring. The audit and the recommendations for the restructuring of the institution are performed by a team of the Holland-based ING Barings financial group.

According to the statements of National Bank of Romania’s governor Mugur Isarescu, CEC will most likely become a commercial bank. Under the circumstances, the depositors will no longer benefit from full warranty for deposits as it is the case now.

“The medium-term strategy for the banking sector includes modifying CEC’s operational statute. This institution is to become a commercial bank and lose State’s warranty. It will later be privatised,” NBR governor Mugur Isarescu has recently said during the latest meeting between NBR management and the members of the Romanian Association of Banks.