The National Bank of Romania Need bridge bank option ....

The board of the Central Bank of Romania (BNR) has drafted an ordinance to set up a bridge bank, which could take over the administration of a bank that is in distress due to a sluggish economy or liquidity crisis. The bridge bank would ensure the continuity of the lender’s operations and address the credit institution’s core problems before marketing and selling it.

The draft emergency ordinance stipulates that the Bank Deposit Guarantee Fund (BDGF) be appointed as a delegated administrator and shareholder of distressed credit institutions, by increasing the institution’s share capital and buying the new shares issued by the BDGF.


When the bridge bank is created, the BDGF is the sole shareholder and carries out the tasks of the supervisory committee. The bridge bank can operate for up to two years from the moment it is established and ensures the prudent continuous provision of banking services related to assets and liabilities taken over in view of its subsequent sale to an eligible third party purchaser.



The ECB (European Central Bank), which was also consulted by the Romanian legislator, says that the existence of a bridge bank could be extended from two years, if the financial risk is still present and no purchaser is found for the credit institutions.


Radu Gratian Ghetea, president of the Romanian Banking Association (ARB), commented that the setting-up of a bridge bank was a normal move, creating the necessary framework in the event that a bank needs support. Ghetea added that credit institutions in Romania have dealt in a reasonable manner with the distortions of the current economic and financial crisis, proving the structural stability of the Romanian banking system.



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