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Amendments to the legal framework of credit institutions

Government Ordinance no. 1/2012 for amending and supplementing certain enactments regarding credit institutions – published in the Official Gazette no. 41 of 18 January 2012 [in Romanian,  Ordonanta nr. 1 din 11 ianuarie 2012 pentru modificarea si completarea unor acte normative din domeniul institutiilor de credit].

Two important Government Ordinances regulating the banking sector have been amended by this new enactment:

  • Government Ordinance 99/2006 regarding credit institutions and capital adequacy (“G.O. 99/2006”); and
  • Government Ordinance no. 39/1996 regarding the setting up and operation of the Banking System Deposit Guarantee Fund, republished (“G.O. 39/1996”).

The most important amendments brought to G.O. 99/2006 refer to:

  • Measures for stability which can be decided by the National Bank of Romania (“NBR”) in case of threats to the financial stability of credit institutions;
  • The transfer of assets and debts towards eligible institutions;
  • Involvement of the Deposit Guarantee Fund in the banking system as shareholder;
  • “Bridge bank” concept and the transfer of assets and debts to such bridge bank;

The most important amendments brought to G.O 39/1996 refer to:

  • The Deposit Guarantee Fund can have the capacity of delegated director or, as the case may be, shareholder of a credit institution towards which a stability measure has been applied by the NBR;
  • The Deposit Guarantee Fund can also be sole shareholder and can exercise the attributions of the surveillance council of bridge banks;
  • In case of exceptional situations, the Government, through the Ministry of Finance, can grant a loan to the Deposit Guarantee Fund for financing certain operations;
  • The Deposit Guarantee Fund has the obligation to perform all operations necessary for the incorporation and operation of the bridge bank, as well as to ensure  the position of delegated director or, as the case may be, shareholder of a credit institution.
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