According to central bank prime-vice governor Florin Georgescu, the bank authority is within schedule with the project’s enforcement.
“By October 2006, we will have all the necessary instruments in place – law, regulations, impact study – so that they be gradually set at the disposition of the banking system and allow the efficient enforcement of these principles as of January 1, 2007,” said Georgescu.
The Basel II regulations will lower the cost of certain credit types, whereas others will grow costlier, depending on the bank’s risk exposure.
Thus, the risk associated to credits to the population will decrease from 100% to 75%, the risk for the banks’ placements in broker securities will decrease from 100% to 20% on the short term and to 50%, respectively, on the long term.
The risk for estate-secured credits will also decrease from 50% to 35%.
Conversely, the credit risk will rise from 0% to 50% for loans in a foreign currency raised by the central administration, respectively from 20% to 100% for credits raised by the regional and local administration.
The risk associated with placements in securities issued by entities that are not listed on the bourse will rise from 100% to 150%.
