Romanian Banks’ Contributions In Deposits Guarantee Fund To Hike As Of 2011

Romania’s deposits guarantee fund FGD will consolidate its funds through raising, as of 2011, the contributions of the participating banks and will progressively give up the stand-by credit lines, according to additional documents to the agreement sealed with the International Monetary Fund.

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"The deposits guarantee fund will strengthen its financing by increasing the effective contribution to 0.34% in 2011 and by progressively raising the coverage rate to 2%," the supplementary Memorandum of Understanding reads.

The annual percentage quota will not exceed 0.5% in lei equivalent of the balance of deposits guaranteed by the Fund. The current ceiling is of 0.2%.

The amendments necessary to change FGD's policy will come into effect at the end of September.

"To ensure the Fund's financial resources, each lender authorized by the central bank must annually grant, at the fund's request, a stand-by credit line in lei currency. The conventions will be sealed, in general, by the end of February of each year. The fund will pay from its own resources a fee of maximum 0.5% for the unused sums," according to current rules on setting up the fund that guarantees bank deposits.

Joint teams from the IMF, the EU and the World Bank were in Bucharest until May 10 for the fourth review of Romania's performance under a EUR20 billion financial package signed last spring.

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