Featured Product

    IMF Assesses Implementation of BCPs in Romania Under the FSAP

    June 20, 2018

    IMF published a report on the detailed assessment of observance of the implementation of the Basel Core Principles for Effective Banking Supervision (BCPs) in Romania, under its Financial Sector Assessment Program (FSAP). Out of the 29 principles, Romania was found to be compliant with 11, largely compliant with 15, and materially non-compliant with 3 BCPs. The material non-compliance was with respect to the principles on country and transfer risks; transactions with related parties; and independence, accountability, resourcing, and legal protection for supervisors.

    As an EU member state, Romania is subject and aligned to the EU common regulatory framework for banking supervision. The adoption of the Capital Requirements Regulation and Directive IV (CRR/CRD IV), which forms the Single Rule Book, was an important step toward stronger prudential regulation. Prudential regulations of the National Bank of Romania (NBR) are broadly aligned to the requirements of BCPs. As of 2017, NBR has identified 11 banks as "systematically important," of which 8 are supervised at group level by the Single Supervisory Mechanism. Some of the key IMF recommendations are as follows:

    • Devote further supervisory attention to risk models, including advanced approach for regulatory capital calculation.
    • Conduct a thematic review on the large exposure limit across banks and review the suitability of EUR 150 million as an absolute limit.
    • Review and amend the regulation on affiliated party transactions in a more prudent manner.
    • Improve the prudential reporting template on related party transactions for more effective monitoring and issue a guidance note/instruction that lays down more concrete requirements for monitoring and managing related party transactions.
    • Perform a periodic review of whether the prudential returns (required outside of European reporting framework) satisfy supervisory needs.
    • Update current regulation based on EU-wide regulatory amendment process reflecting new standards for IRRBB, which were published in April 2016.
    • Include explicit requirements in the regulation that banks include appropriate scenarios into their stress testing programs to reflect country and transfer risk analysis.
    • Expand the scope and required items of reporting on operational risk events to keep the NBR apprised of developments affecting operational risk.
    • Consider the opportunity to require, at least for significant banks, more frequent disclosure (than on an annual basis).
    • Introduce a legal provision protecting the NBR as an institution against lawsuits for actions taken and/or omissions made while discharging its duties in good faith.

     

    Related Link: Detailed Assessment of BCPs

    Keywords: Europe, EU, Romania, Banking, FSAP, BCP, CRR/CRD, IMF

    Related Articles
    News

    US Agencies Requests Comments on Use and Impact of CAMELS Ratings

    US Agencies (FDIC and FED) are seeking information and comments from interested parties regarding the consistency of ratings assigned by the agencies under the Uniform Financial Institutions Rating System (UFIRS).

    October 18, 2019 WebPage Regulatory News
    News

    BoE Announces Date for Publication of Stress Test Results for Banks

    BoE announced its plans to publish results of the full UK annual stress tests on December 10, 2019.

    October 18, 2019 WebPage Regulatory News
    News

    PRA Consults on Approach to Supervising Liquidity and Funding Risks

    In consultation paper (CP27/19), PRA published a proposal (CP27/19) to update the supervisory statement SS24/15 on the PRA approach to supervising liquidity and funding risk.

    October 17, 2019 WebPage Regulatory News
    News

    US Agencies Consult on Policy Statement on Allowance for Credit Losses

    US Agencies (FDIC, FED, NCUA, and OCC) are consulting on the policy statement on allowances for credit losses and on the guidance on credit risk review systems.

    October 17, 2019 WebPage Regulatory News
    News

    FSI Paper Examines Use of Suptech Initiatives by Financial Authorities

    The Financial Stability Institute (FSI) of BIS published a paper that examines the suptech developments by analyzing suptech initiatives of 39 financial authorities globally.

    October 17, 2019 WebPage Regulatory News
    News

    ECB Publishes Recommendations on Euro Risk-Free Rates Transition

    ECB published a report, by private sector working group on euro risk-free rates, which contains recommendations, from a risk management perspective, on the transition to new risk-free rates.

    October 17, 2019 WebPage Regulatory News
    News

    US Agencies Publish Notice to Extend Form FFIEC 102 for Three Years

    US Agencies (FDIC, FED, and OCC) published a joint notice regarding extension of the market risk regulatory report for institutions subject to the market risk capital rule (FFIEC 102).

    October 17, 2019 WebPage Regulatory News
    News

    FSB Report Examines Implementation and Impact of G20 Financial Reforms

    FSB published fifth annual report on the implementation and effects of the G20 financial regulatory reforms.

    October 16, 2019 WebPage Regulatory News
    News

    EBA Launches Consultation on Comprehensive Pillar 3 Disclosures

    EBA proposed the new comprehensive implementing technical standard (ITS) for public disclosures by financial institutions.

    October 16, 2019 WebPage Regulatory News
    News

    EBA Consults on Revised Technical Standards on Supervisory Reporting

    EBA launched a consultation on the revised implementing technical standards, or ITS, on supervisory reporting.

    October 16, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 3997