Download Free Capital Markets And Non Bank Financial Institutions In Romania Book in PDF and EPUB Free Download. You can read online Capital Markets And Non Bank Financial Institutions In Romania and write the review.

Capital Markets and Non-bank Financial Institutions in Romania is part of the World Bank Working Paper series. These papers are published to communicate the results of the Bank's ongoing research and to stimulate public discussion. With only three years remaining before joining the European Union, Romania is working hard to improve its capital markets and non-bank financial institutions, which remain less developed than those in other accession countries. Strengthening these sectors has become a top priority for policymakers, whose primary objective is to ensure that the financial system is sufficiently developed to serve the growing demands of the Romanian economy. During 2003 and 2004, the Romanian authorities made significant efforts to draft, adopt, and enact new legislation to align Romania with EU financial directives. Despite these efforts, however, challenges remain in the area of supervisory capacity and the implementation of laws and regulations. This study assesses key issues and recommendations for development, and reviews the specific changes which are necessary in four areas: structural reforms, market institutions, and infrastructure; accounting, transparency, and disclosure; market infrastructure; and credit enhancements.

Romania

International Monetary Fund. Monetary and Capital Markets Department

Published: 2018-06-08

Total Pages: 63


Get eBook

This Technical Note discusses the results of systemic risk analysis and stress testing of Romania’s financial sector. Although the Romanian banking sector has a strong initial capital position, banks are affected significantly by the realization of the shocks captured by the scenarios. The stress test results indicate that an extreme but plausible adverse scenario would have a significant negative impact on the capital ratios of the banking system. Although the banking sector as a whole maintains capital ratios above the minimum regulatory requirements, several (smaller) banks prove vulnerable. The extreme adverse scenario reflects downside external risks as well as a domestic demand shock impacting private consumption and investment.
This paper discusses key findings of the financial sector stability assessment for Romania. The assessment reveals that in recent years, Romania’s financial sector regulatory authorities have made significant progress in adopting international best practices, including through transposition of European Union directives, as well as through implementation of many of the recommendations of the 2003 Financial Sector Assessment Program. In the current circumstances, a number of measures to strengthen the crisis management and safety net framework are recommended.
Financial institutions intermediate between savers and investors and contribute to corporate governance. Equity and bond markets in the former centrally planned economies are not yet in a position adequately to provide these services. It is not yet clear that investment funds will provide the necessary financing and corporate management. Therefore the first priority for financial sector reforms must be to establish a healthy commercial banking sector. Banks are the most promising source of financing, provide payment services which are crucial to both the real and financial sectors and, by monitoring the use of loaned funds, will be the primary source of corporate governance during the transformation to a market economy.
The countries of Central and Eastern Europe have been through a profound transition process for more than a decade now. The financial sectors and markets in the region have been subject to major structural reforms including privatization, liberalization and the acquisition by foreign banks of controlling interests in local financial institutions. This important new book includes papers that chart this process. Topics discussed include the implications of future EU membership, and the strategies pursued by the World Bank and International Monetary Fund.
The integration of the countries of Central and Eastern Europe and the Commonwealth of Independent States international financial system was arguably one of the most profound changes experienced by the world economy in the 1990s. This book examines these countries in reforming their financial systems in the first decade of transition. Through case studies as well as more thematic approaches contributors deal with crucial elements of building a market-based financial system, the transformation of the banking sector, and non-bank reform and regulation of financial markets. They emphasise the importance of institution-building to the process of financial sector transformation and highlight the lessons to be learned from transitional financial experiences.
This financial sector assessment (FSA) summarizes the key findings and recommendations of the 2008 FSAP update report for Romania. The main findings of the FSAP update are: the financial system entered the crisis well capitalized and with high liquidity buffers, and the four financial sector regulatory authorities have made significant progress in adopting international best practice, including through transposition of European Union (EU) directives, and implementation of many of the recommendations of the 2003 FSAP. While the banking system is currently well capitalized, the rapid deterioration in economic conditions and the depreciation of the leu may put strains on bank capital. The measures to strengthen the system are needed: an ex ante strengthening of capital positions is warranted; the overall exposure of foreign parent banks to Romania should be maintained; banks need to develop effective debt restructuring or workout procedures for household and corporate clients; crisis management coordination should be accelerated; bank resolution powers strengthened; and deposit insurance funding and payout arrangements improved. Some cross-sectoral themes emerge to strengthen the supervisory frameworks, including the need to strengthen the political independence and financial autonomy of the non-bank financial regulators; better cross-sectoral cooperation in supervision of financial groups; further movement toward a more risk-based approach to supervision; better consistency in valuation rules for market instruments; adoption of international financial reporting standards (IFRS) accounting; and in the banking sector, strengthening of the basel two implementation framework. Longer term developmental issues include the need to address obstacles to capital market development, certain risks in insurance, and to ensure sustainability of the pension system reform.