The exposure of BIS reporting banks to the Romanian banking system decreased by 8% y/y to USD 30.1bn at the end of 2012 but still accounts for 25% of the total assets of the financial institutions [excluding the central bank] in the country, according to our calculations based on BIS reporting central bank data.

The outflows generated by the BIS reporting banks withdrawing funds from the country, adjusted for exchange rate variations, were USD 3.26bn in 2012 – accounting for 10% of their exposure at the end of 2011. The decrease in exposure differs from the volume of outflows because of the exchange rate adjustments.

The outflows from the local banking system were slightly milder than the average outflow in Emerging Europe countries*, where they accounted for 12% of the total exposure at end-2011. Steepest outflows were reported in Hungary [USD 10.3bn, 30% of exposure at end-2011], while the sole country that witnessed inflows was Slovakia [USD 4.7bn or 67% of the exposure at end-2011].

For the whole period of 2009-2012, BIS reporting banks reduced their exposure to Romanian banking system by 32% from USD 44.3bn at the end of 2008 to USD 30.1bn at the end of 2012. The exchange rate adjusted outflows were USD 12.2bn for the whole four-year period – or 27% of their exposure at the end of 2008. At the end of 2008, the assets held in Romanian banks by BIS reporting banks [meaning their exposure] accounted for 34.4% of the local financial institutions’ assets.

In Q4/2012 alone, the outflows generated by BIS reporting banks withdrawing money from the Romanian banking system reached USD 1.66bn – the third largest outflow in the deleveraging period that started in Q1/2009. The local banking system had previously witnessed net inflows from BIS reporting banks in Q3/2012 after five consecutive quarters of outflows.

* Albania, Belarus, Bosnia, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Moldova, Montenegro, Poland, Romania, Serbia, Slovakia, Slovenia.