Tuesday, November 13, 2012

Romanian Central Bank May Ask Lenders to Increase Provisions

Romania’s central bank will probably ask some local lenders to increase their provisions at the beginning of next year, Deputy Governor Bogdan Olteanu said.

The new provisions will be triggered by a reevaluation of assets pledged as collateral for loans granted by the banks in the country, Olteanu said at a conference in Bucharest today.

The Banca Nationala a Romaniei has asked commercial banks to adjust the value of collateral to current market conditions after a two-year recession pushed asset prices down.

“We are in the procedure of revising the collaterals and where it is necessary, probably at the beginning of next year, we will ask for new provisions,” Olteanu said.

He also said non-performing loans in the banking system currently exceed 17 percent of total lending.

To contact the reporter on this story: Andra Timu in Bucharest at atimu@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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