Fitch includes Romanian banking system in high risk category

Romania’s banking system was classed in the high risk category in a Fitch rating agency report on systemic risks facing the banking sector. The Romanian banking system was downrated from a moderate risk classification to a highly risky one due to the rapid growth of credits and the high volatility of the exchange rate.

Romania was included in the third risk class, due to the macro-economic indicator which evaluates potential system risks, determined by three possible causes: rapid growth of bank credits, the artificial growth of the value of assets and/or the volatility of the exchange rate. The MacroPrudential Indicator set up by Fitch shows the vulnerability of the banking systems, from a scale from 1 to 3 where 3 represents a high risk level while 1 a low one.

Moreover, Fitch’s bank systemic indicator analyzes the stability of the banking system where Romania scores a D, typical for emerging countries with small and weakly developed banking systems. Several other countries share the same place with Romania, namely Slovakia, Turkey and Kazakhstan.