EXCLUSIVE: IMF: Parent Banks May Want To Increase Exposure To Romania Voluntarily

"Our expectations for the Vienna initiative was that this would be a temporary measure and (…) I think we are getting close to that point," said Jeffrey Franks, IMF mission head to Romania.

"I would expect that in a year and a half from now we would no longer need the agreement," Franks told MEDIAFAX.

Early 2009, Romania secured a EUR20 billion aid package from the IMF, the European Commission and other international lenders to cushion the effects of the recession.

The parent banks of Romania's largest nine lenders met in Vienna at the time and agreed to keep their overall exposure to the country unchanged by April 2011, while ensuring capital adequacy levels over 10% for their local subsidiaries.

As of July this year, the parent banks can reduce or increase their exposure to Romania by up to 5% compared to the initial level.

According to Franks, once the Romanian economy starts recovering, the banking sector will also grow and the lenders will have new business opportunities on the local market.

"Romania is a country that has a very bright future. The average growth rate in Romania in the next 10 or 20 years is going to be much higher than the EU average because there's going to be a process of catching up," Franks said. "The banks (…) will want to take advantage of that."

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