1. BANCA NAŢIONALĂ A ROMÂNIEI BANCA NAŢIONALĂ ROMÂNIEI

2. BANCA NAŢIONALĂ A ROMÂNIEI Romanian links with the euro area are material, but the contagion effects from sovereign debt crisis has remained subdued so far… Source: ECB, European Commission, BNR calculations Bloomberg, BNR calculations Importance of the EA for the economy and the banking sector Risk perception (bp), January - mid May 2012 Note: Min, Max, and May-15 values

3. BANCA NAŢIONALĂ A ROMÂNIEI …the soundness of the Romanian macroeconomic stance and of the prospects, in line with the region, contributing to such developments Source: Source: European Commission, spring forecast 2012 (May 2012) * projections Main macroeconomic indicators in selected countries

4. BANCA NAŢIONALĂ A ROMÂNIEI A slowdown of the EA economic growth would be relatively well managed by the Romanian companies involved in the foreign trade… Source: BNR calculations Main financial soundness indicators for corporate sector, June 2011

5. BANCA NAŢIONALĂ A ROMÂNIEI …and an orderly deleveraging process in the EA would orderly impact the SEE region. For Romania, the indirect channel (common lender) marginally changed in 2011, while direct channel is weak Source: BIS, BNR calculations, Fratzscher (2002) Sensitivity of the banking sectors to regional shocks, through common lender channel Average holdings of non-resident government securities by the RO banks Source: monetary survey

6. BANCA NAŢIONALĂ A ROMÂNIEI The Romanian banking sector weathered relatively well the financial crisis… Source: BNR Capital adequacy ratio (percent) Banking profitability (percent) Source: BNR

7. BANCA NAŢIONALĂ A ROMÂNIEI …and is adequately equipped to withstand liquidity shocks from capital flights Liquidity stress test results, December 2011 (RON mil) Stress test scenarios S1S2 Domestic deposits-10%-20% ST parent funding-25%-50% ST corporate external funding -25%-50% Banks FX swaps 1M-25%-50%

8. BANCA NAŢIONALĂ A ROMÂNIEI The Romanian banks with Greek shareholders are in a good position to cope with adverse developments Main banking indicators (December 2011) Source: BNR

9. BANCA NAŢIONALĂ A ROMÂNIEI Credit conditions orderly developed from both domestic banks and foreign lenders financing Romanian economy Source: BNR * BNR estimations for NBFIs, for the period 2006-2008 Lending from domestic and foreign financial institutions (MFIs and NBFIs*)

10. BANCA NAŢIONALĂ A ROMÂNIEI Lending standards of the domestic banks tightened, in line with euro area developments… Note: Net percentage - positive values indicate a tightening of lending standards Source: BNR, Bank lending survey, May 2012 ECB, The Euro Area Bank Lending Survey, May 2012 Changes in credit standards (net percentage %) CompaniesHouseholds

11. BANCA NAŢIONALĂ A ROMÂNIEI …the availability of funding in FX currencies having a contribution in such direction Source: BNR calculations Loan-to-deposit ratio, by currency Wholesale funding from abroad, EUR bl. Source: BNR

12. BANCA NAŢIONALĂ A ROMÂNIEI FX lending is mainly a stock challenge… Source: BNR calculations Non-financial companies Households Source: Private Credit Bureau, BNR calculations Loans from domestic banks and NBFIs, by currency and type (RON bln)

13. BANCA NAŢIONALĂ A ROMÂNIEI …and the credit risk from FX lending over-paced the credit risk in domestic currency Source: BNR calculations NPL non-financial companiesNPL households Source: Private Credit Bureau, BNR calculations

14. BANCA NAŢIONALĂ A ROMÂNIEI The banks asset quality remains an important challenge for the financial stability Source: BNR calculations NPL non-financial companiesNPL households Source: Private Credit Bureau, BNR calculations

15. BANCA NAŢIONALĂ A ROMÂNIEI Conclusions A disorderly unfold of the EA sovereign debt crisis would impact Romania through: (i) a deterioration of the availability of funding (through both price and quantitative channels), and (ii) a weakening economic growth prospects. The Romanian banking sector and the companies involved in foreign trade are adequately equipped to withstand external adverse developments. Credit conditions orderly developed in Romania, the central bank taking early measures: (i) calling for additional capital from banks shareholders, (ii) supporting Vienna Initiative type arrangements, and (iii) fostering cooperation with home supervisory authorities. Carrying on prudent policy implementation, in line with EU and IMF arrangements, will continue to provide confidence to the markets and to keep the prudential buffers to adequate levels.