The National Bank (BNR) said on Thursday that the Competition Council's decision regarding the activity of several banks on the money market requires further clarification in order to avoid confusion, unrealistic expectations or unfounded accusations that could affect financial stability.

'The Competition Council's decision concerning banking activity on the money market, which relates to a technical procedure that is difficult to understand even for specialists, requires a number of clarifications in order not to generate further confusion, unrealistic expectations or unfounded accusations with effects on financial stability. First of all, it must be said that the investigation does not concern the National Bank of Romania in any way in its capacity as administrator of the trading system and issuer of operating rules and regulations. At least this is what the Competition Council's statement specifies: 'the decision did not target regulations or policies in the banking sector',' BNR spokesman Dan Suciu said in a statement.

According to the central bank, although the BNR itself was not targeted by the investigation, several issues related to its responsibilities needed clarification, especially given public comments made both before and after the decision.

The statement stressed that further explanations were needed to prevent misunderstandings from generating unwarranted controversies or unrealistic expectations that could affect financial stability and lending policies.

As an example, the BNR pointed to remarks by Competition Council president Bogdan Chiritoiu, who said the differences examined regarding ROBOR quotations amounted only to fractions of a percentage point compared with an assumed correct level.

'However, in various public interventions and comments, and even in certain legislative initiatives, people are already speaking of percentage-point differences, based on the claim that ROBOR rose too much and too abruptly, from 1.25% to 8.1% in two years. The BNR has repeatedly shown, including recently, that beyond the fact that ROBOR fluctuates by plus or minus one percentage point around the monetary policy rate, the spectacular increase during those years cannot be attributed to banks but rather to a complex situation generating global inflation, which in turn required higher interest rates for all currencies and regional markets,' the statement said.

The central bank also argued that recent public discussions had raised further questions about the Competition Council's decision to fine banks participating in the ROBOR fixing process.

According to the BNR, the Competition Council should clarify which provisions of competition legislation were allegedly breached, given that the Council itself had stated that existing money market regulations and fixing procedures were sound and had been respected by banks.

The central bank also questioned comments referring to 'confidential and strategic information exchanges' and 'excessive transparency,' saying that such arguments appeared contradictory because a lack of information and transparency is generally considered harmful to competition.

The BNR noted that it had cooperated fully with the investigation, providing documents and explaining the role of its Market Operations Department and Supervision Department in ensuring the proper functioning of the money and foreign exchange markets.

It also reiterated that Governor Mugur Isarescu's August 2022 remark that 'banks had gone too far regarding ROBOR' was a legitimate monetary policy instrument aimed at correcting short-term market fluctuations and should not be interpreted as evidence that the central bank suspected wrongdoing on the money market.

'Competition Council decisions are extremely important and may have very serious implications for financial stability and lending appetite, with numerous consequences. In order to be accepted, corrected or rejected - as the case may be - they must be explained as clearly as possible. Whatever one may say, too much information on these issues can only be welcome,' the statement concluded.AGERPRES (RO - writing by: George Banciulea; EN - writing by: Simona Iacob)