The NCMO meeting of 16 December 2019

2019-Dec-18 | Meetings

The General Board of the National Committee for Macroprudential Oversight (NCMO) convened for a meeting on 16 December 2019.

During the meeting, Board members discussed topics such as the regular analysis on the recalibration of the countercyclical capital buffer, the issue of the worsening external imbalance from the perspective of macroeconomic stability, and the situation of savings and loan banks. Moreover, the members of the NCMO General Board were informed about the systemic risks identified in the national financial system, the impact of credit institutions’ funding plans on the flow of credit to the real economy, as well as about the results of the solvency stress test of the banking sector.

Following the discussions, Board members unanimously approved NCMO Recommendation No. R/5/2019 on the countercyclical capital buffer in Romania, which – considering that total indebtedness currently remains below the signalling threshold and setting a countercyclical buffer rate above 0 (zero) percent is, thus, not necessary – recommends the National Bank of Romania to maintain the countercyclical buffer rate at 0 (zero) percent and to closely monitor developments in structural imbalances and indebtedness at aggregate and sectoral levels.

In addition, the NCMO General Board decided to establish a working group with the mandate to identify possible solutions for mitigating the trade imbalance stemming from trade in agri-food items.

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.