Popa, NBR: Major banking groups need to be more closely supervised at home

Bank regulation needs to be more tightly correlated at a European level, says Cristian Popa, NBR vice-governor in charge with financial stability, because supervisors of host-countries, where large financial groups are present through subsidiaries, have a limited power to act over them.
Foreign groups concentrate over 80% of Romania’s banking assets, with only two Romanian-held banks, CEC Bank and Banca Transilvania, being present among the top ten players in the system.
“We wrote the manual in a bid to scale back foreign currency lending, for macroeconomic reasons and to secure financial stability. As the steps impacted only the domestic market, they haven’t been, by far, as efficient as a framework that would have also targeted the parent-banks’ markets of origin,” said Cristian Popa during a seminar organised at the end of last week on the occasion of NBR’s 130th anniversary.
The heavy weight of foreign currency lending, drawing near two thirds of total loans granted by banks to the private sector, has put the NBR in a difficult position ever since the financial crisis onset.