The General Board of the National Committee for Macroprudential Oversight (NCMO) convened on 6 June 2019 for its third meeting of the year. During the meeting, Board members discussed issues focusing on macroprudential policy such as: (i) the regular analysis on the recalibration of the countercyclical capital buffer; (ii) the draft 2018 Annual Report of the National Committee for Macroprudential Oversight, (iii) the review of government securities market, (iv) the appropriateness of reciprocating the macroprudential measures adopted by France and Sweden, (v) the assessment of materiality of third countries for the Romanian banking sector in relation to the recognition and setting of countercyclical buffer rates and (vi) the strategy regarding the implementation of the International Financial Reporting Standards (IFRS) by non-bank financial institutions (NBFIs), entities under the NBR supervision, as a basis of accounting and for preparing individual financial statements, and the methodology for identifying the critical functions of credit institutions.

On this occasion, the NCMO General Board was informed of (i) the systemic risks identified in the national financial system, (ii) developments in solvency of the banking sector in Romania and (iii) the macroprudential measures set forth in the National Euro Changeover Plan. Furthermore, the Regulation on the confidentiality of information and documents and archiving rules was presented in a first reading during the meeting.

Following the discussions, the macroprudential policy measures below were approved:

1. NCMO Recommendation No. R/1/2019 on the countercyclical capital buffer in Romania – Considering that total indebtedness currently remains below the alert threshold and setting a countercyclical buffer rate above 0 (zero) percent is, thus, not necessary, the National Bank of Romania is recommended to maintain the countercyclical buffer rate at 0 percent. On the other hand, the further cyclical widening of the budget deficit and the current account deficit could call for a future increase in the countercyclical buffer rate.
2. NCMO Recommendation No. R/2/2019 on the strategy regarding the implementation of the International Financial Reporting Standards (IFRS) by non-bank financial institutions (NBFIs), as a basis of accounting and for preparing individual financial statements – The analysis made by the MPF-NBR inter-institutional working group in what concerns the IMF recommendation pointed out that the applicable solution is the full implementation of IFRS by non-bank financial institutions (NBFIs) entered in the General Register, as a basis of accounting and for preparing individual financial statements. The National Bank of Romania is recommended to issue, in compliance with the related legal provisions, the regulations necessary for the full implementation of IFRS by non-bank financial institutions (NBFIs) entered in the General Register, as a basis of accounting and for preparing individual financial statements.
3. NCMO Decision No. D/1/2019 on not applying through voluntary reciprocity the macroprudential policy measures adopted by France and Sweden – Whereas the eligible exposures of the Romanian banking sector to France and Sweden are immaterial, the macroprudential measures adopted by France and Sweden are not reciprocated. These exposures will continue to be periodically monitored by the National Bank of Romania, which will propose the necessary measures should these exposures become material.
4. NCMO Decision No. D/2/2019 on identifying material third countries for the Romanian banking sector in terms of recognising and setting countercyclical buffer rates – Whereas the data available at end‑2018 have not indicated any material third country for the Romanian banking sector in terms of recognising and setting countercyclical buffer rates, the NCMO General Board has decided that, for 2019, there are no material third countries for the banking sector in Romania.

The National Committee for Macroprudential Oversight was established by virtue of Law No. 12/2017 on the macroprudential oversight of the national financial system, thus ensuring that Recommendation of the European Systemic Risk Board (ESRB) No. 3/2011 on the macroprudential mandate of national authorities was implemented. The NCMO brings together representatives of the National Bank of Romania, the Financial Supervisory Authority and the Government of Romania. The NCMO’s mission is to ensure coordination in the field of macroprudential oversight of the national financial system by setting the macroprudential policy and the appropriate instruments for its implementation.