The NCMO meeting of 14 October 2020
The third meeting of this year of the General Board of the National Committee for Macroprudential Oversight (NCMO) was held on 14 October 2020 by written procedure.
During the meeting, Board members examined analyses and adopted measures concerning macroprudential policy and systemic risk, namely: (i) the regular analysis on the recalibration of the countercyclical capital buffer and (ii) the manner of implementing the buffer for other systemically important institutions in 2021.
In addition, the NCMO General Board was informed of: (i) the results of the regular analysis on the systemic risk buffer, (ii) the implementation of the Recommendation of the European Systemic Risk Board on monitoring the financial stability implications of debt moratoria, and public guarantee schemes and other measures of a fiscal nature taken to protect the real economy in response to the COVID-19 pandemic (ESRB/2020/8), (iii) the systemic risks identified across the domestic financial system, (iv) the measures taken by the National Bank of Romania (NBR) in the context of the COVID-19 pandemic, and (v) the ESRB’s risk outlook and recommended policy proposals.
Following the discussions, the macroprudential policy measures below were unanimously approved:
- NCMO Recommendation No. R/7/2020 on the countercyclical capital buffer – Considering that total indebtedness currently remains below the signalling threshold, as well as the uncertainties surrounding the economic and financial developments at national and international level generated by the spread of COVID-19 infections, the National Bank of Romania is recommended to maintain the countercyclical buffer rate at 0 (zero) percent. Moreover, the NBR is recommended to further monitor developments in the economy and lending at aggregate and sectoral levels, with a focus on the impact of COVID-19 pandemic on household and corporate financing by credit institutions.
- NCMO Recommendation No. R/8/2020 on the manner of implementing the buffer for other systemically important institutions (O-SII buffer) in the course of 2021 – Pursuant to the national legal provisions and the methodology harmonised with the EBA Guidelines on the criteria to determine the conditions of application of Article 131(3) of Directive 2013/36/EU (CRD) in relation to the assessment of other systemically important institutions (O-SIIs), the National Bank of Romania is recommended to impose, starting 1 January 2021, a capital buffer for other systemically important institutions (O-SII buffer), on an individual or consolidated basis, as applicable, calculated based on the total risk exposure amount for all the credit institutions identified as having a systemic nature based on the data reported as at 31 December 2019. The O-SII buffer level for each systemic credit institution is to be published on the NCMO website by 1 December 2020, according to the European and national regulations in force.
In addition, the NCMO General Board decided to set up a working group tasked with identifying possible solutions to support green finance.
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.