World Bank asks for financial system supervision

The World Bank (WB) is to grant Romania financing worth €1 billion in the form of three individual loans. The first two are to go to the Treasury to finance the budget deficit - one in July and one in December, according to the World Bank’s Country Director and Regional Coordinator for South East Europe Country Unit, Orsalia Kalantzopoulos. “The precise distribution of funds has not yet been established. The amounts have the same destination, to finance the budget deficit,” Kalantzopoulos said. On 25 April, an informal agreement will be established between the Romanian government and World Bank officials on fiscal and monetary policy measures that Romania is to apply under WB supervision. “We currently have a menu of some 15 fiscal and monetary policy measures that we are discussing with Romanian officials. Of these, 5-6 measures are to be discussed at the Spring Meeting [WB and International Monetary Fund meeting], also to be attended by representatives of the Romanian Government,” she added. The agreement will be officially signed after the institution’s Board approves the financing for Romania, at the end of June. “Two or three days later, the first loan is to be released,” Kalantzopoulos said. One of the measures could be to establish one or even more agencies, under the control of the National Bank of Romania (BNR) and the Finance Ministry. They are to supervise the entire financial system. “We will provide the best practices for the supervision of the entire banking system. Here we are also talking about banks, insurance companies, the capital market, or the private pension system, areas in which BNR supervision was not well developed until now,” added the World Bank’s official. Romania recently applied for international financing worth about €20 bln. (E.I.)