Romanian Bks Want Insolvency Rules Amending

Romanian banks want the amending of the insolvency legislation in order to limit the cases in which a creditor could ask for the insolvency of a company for debt non-payment, as the lenders are forced to book provisions or even start the debtor's foreclosure.

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Officials with Romanian Banks Association, or ARB, and representatives of the country’s central bank met Tuesday at the regular end-month meeting and one of the topics of discussion was the insolvency-related legislation.

"We discussed with central bank respresentatives a very interesting topic, which concerns us all, namely the legislation on declaring the insolvency. In Romania, any creditor, no matter its size, can start up the insolvency process against a very powerful company. This puts the banks in the situation of booking provisions or even starting the foreclosures," ARB president Radu Ghetea said.

Ghetea explained that ARB would try to get support in changing the legislation.

A number of 14,483 companies entered insolvency in 2008, up 75% from 8,297 a year before, according to the data of the National Trade Registry.

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