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BNR: Romanian banking system is doing well

Daianu: short selling should be banned on EU's emerging markets

The state of health of the Romanian banking system is good, and Government and Central Bank's common economic policies are designed to reduce the effects of the international financial crisis upon the local economic and financial environment, BNR Prime Vice-Governor Florin Georgescu has stated in Hunedoara recently. ‘We have robust banks that can efficiently continue their crediting activities but, of course, in parallel to actively and dynamically raising deposits. We believe that the combination of economic policies conducted by the Government and by BN, the effects of the international financial crisis upon the local economic and financial environment can be reduced, minimized' said Florin Georgescu.

On the other hand, during a session of the EP's Economic and Monetary Affairs Commission, MEP Daniel Daianu has recently made a number of proposals aimed at mitigating the impact of the financial crisis on EU's emerging economies, Agerpres informs quoting a press release. ‘We, from EU's emerging economies, are extremely concerned about the impact of this financial crisis. Our region may become a collateral victim of this crisis because of the immense volatility on financial markets, because of speculative attacks on our national currencies, capital withdrawals and ever-deepening recession. In the light of such realities, in my view, one of the necessary measures to be taken is to prohibit short-selling on our markets even if for a limited period when things get out of hand. What the Americans and the British have done recently by banning large bank stock short selling is very illustrative of what I mean to say' Daniel Daianu stressed out during the debating.

Daianu further found that another issue comes from the banks' increasing predisposition to leveraging at times when they are obsessed with recapitalisation. ‘As shown by some of the data available, when the central banks inject capital into and open credit lines for commercial banks, the latter do not always have a positive response to such stimuli (...) meaning they do not always resist the temptation not to freeze-up lending' he also noted.

Foreign direct investment totalled eur 7.25 bn in 2007

The foreign direct investment (FDI) in Romania amounted to EUR 7.25 bn in 2007, EUR 2.22 bn of which representing registered capital, the Central Bank of Romania (BNR) has informed recently, according to Agerpres. Of the total, the re-invested net profit was EUR 1.327 bn (18 per cent) and net credit received from foreign investment - EUR 3.703 bn (51 per cent). The FDI end balance on December 31, 2007 was EUR 42.77 bn, EUR 31.501 bn of which representing registered capital (74 per cent) and EUR 11.269 bn - net credit from foreign investors - 26 per cent. From the point of view of economic preferences in foreign investment, the FDI seems to have primarily gone into manufacturing (32.9 per cent) where the most attractive branches were metal working (7.5 per cent), food, beverage and tobacco industries (5.2 per cent), oil processing, chemical goods, rubber and plastic masses (4.4 per cent), automotive industry (3.6 per cent), and cement, glass, ceramics (3.5 per cent). Other recipients of massive FDI in 2007 were the financial brokerage and insurance including banking and insurance operations which stand for 23.3 per cent of the total FDI, retailing and wholesaling (14 per cent), constructions and property transactions (7.8 per cent)and telecommunications (6.5 per cent).

From a geographic point of view, the FDI flows seems to have primarily gone towards Bucharest-Ilfov (64.3 per cent), but also to the regions of development Centre (8.3 per cent), South (6.9 per cent), South-East (5.7 per cent) and west (5.5 per cent).

 

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Tags: crisis foreign financial economic banking bnr

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