NBR not completely independent

The National Bank of Romania (NBR) is not 100% independent yet, either from the legal or the operational point of view. The central bank will acquire this status in the wake of legislative modifications that Romania has pledged to enforce by the end of this year, says NBR Governor Mugur Isarescu.

Isarescu thus confirms the assertions included in the European Commission Report for 2003, which showed that banking legislation was not entirely adjusted to stipulations of the community acquis, which guarantees independence of the central bank.

The government has just supplied evidence to support these statements, mediating privileged access of some state-owned enterprises to a financial institution, even though a state-owned one.

This happened after the European Commission last November pointed to the need to eliminate privileged access of public sector authorities to financial institutions. This implicitly shows why the European Union, as well as the World Bank and the IMF insisted that the Romanian Savings Bank (CEC) should also be privatised as soon as possible, so that the state should no longer be tempted to make use of this institution, and so that the latter be an equal player on the financial market.

NBR was late in commenting upon the involvement of CEC in financing the governmental project linked to the construction of houses for the young and of gymnasiums. Romania has pledged to amend the law on the status of the central bank by the end of 2004.

Thus, certain expressions and key words that could be interpreted in such a way as to harm the independence of the central bank will be eliminated from the text of the law.

Taking advantage of the special law regulating the activities of the savings bank, with the Finance Ministry as the single shareholder, the Nastase-led government has granted the institution an exemption from the banking law, allowing it to finance two public companies, ANL and CNI, by 6,500 billion ROL, above the legal ceiling.

The European Commission report also points to necessary legislative changes of the chapter related to the ban on direct financing of the public sector by the central bank, to the end of full adjustment to community norms, especially as regards the acquisition by the bank of T-bills issued by the Finance Ministry.
razvan.voican@zf.ro