PROPOSED AS ADVISOR TO THE "UBER-GOVERNMENT" Isărescu, advisor to the Ministry of Finance as well

Starting from the principle that every institution needs to have "a council of wise men", the Ministry of Public Finance (MFP) has created its own Advisory Council.

Said council is made up of no less than the Governor of the NBR, Mugur Isărescu, and "of every prime-minister and finance minister that Romania has had since 1998, who will be debating issues of interest to Romania", as announced by Finance minister Eugen Teodorovici on Friday.

"I have personally noticed that in civilized countries there are such kinds of colleges that discuss issues of interest to the economy. (...)

My opinion is that we all stand to gain, because every one of them will share their own experience".

Mr. Teodorovici announced that Mugur Isărescu has agreed to the creation of the new structure and that, more than that, he has proposed for the first meeting of the Council to be held at the headquarters of the NBR. The meeting has already been scheduled to take place in September, as announced by finance minister Eugen Teodorovici.

He added that the members of the new entity will hold quarterly consultations.

• Pârvan, AOAR: "The Macroprudentiality Committee is definitely unconstitutional"

The announcement concerning the creation of an advisory council at the Ministry of Public Finance comes just a few days after the Government approved the creation of the National Committee For Prudential Oversight, which is set to be helmed by Mugur Isărescu as well.

Eugen Teodorovici said that this committee is being created following a recommendation of the European Committee concerning the financial system: "Romania has made such a proposal starting from the fact that the NBR plays a significant role on the financial market".

Adrian Vasilescu, strategy consultant at the NBR, says that the new structure "will be a kind of council of the wise men", which will issue opinions and analyses as well as warnings to the oversight departments of the NBR and the ASF.

The National Committee for Macroprudential Oversight is in fact an "uber-government", says lawyer Gheorghe Piperea, who stressed the fact that the recommendations the Committee will issue to the NBR, as well as to the ASF and the Government will be mandatory, according to the draft law approved by the government in the meeting it held last week.

On the contrary, Eugen Teodorovici claims that the recommendations of this "council of wise men" will not create "legal obligations" the implementation of which would be required: "The government will review the recommendations and if it doesn't implement them, it will have to present justifications on why it didn't".

But the communiqué issued by the government states otherwise: "The intended recipients of the recommendations made by the National Committee for Macroprudential Oversight are either the NBR and the ASF, as sector-specific financial oversight authorities, or the Romanian Government.

After receiving such recommendations or warnings, according to the draft law, their intended recipients have the obligation to implement the recommended measures or to take action towards reducing the risks they have been warned about, including by issuing regulations".

According to the draft law, the Committee is an entity that will have a supervisory role in for the financial system, and will consist of representatives of the National Bank of Romania, of the Financial Oversight Authority and of the Government, and will function as an inter-institutional cooperation structure, without legal personality, meant to ensure the coordination of the macroprudential supervision on a national level.

The decision-making entity of the National Committee for Macroprudential Oversight will be the General Council, consisting of nine members, respectively: the governor, the first deputy-governor, the two deputy governors and the Chief-economist of the National Bank of Romania, the president and first vice-president of the National Oversight Authority and two representatives of the Government, appointed by the prime-minister.

Discussing this aspect, lawyer Gheorghe Piperea says: "Upon closer analysis, what we find is that this Council is actually another version of the NBR, because 5 of 9 members of the Council are the executives of the NBR, 2 members are representatives of the ASF, and the current president of the ASF is a banker, while the other two members of the Council will be appointed by the government, and in that regard, I doubt that the prime-minister would appoint them without the prior agreement of the NBR".

Cristian Pârvan, the secretary general of the Association of Romanian Businesspeople (AOAR), agrees with Mr. Piperea's opinion, and stresses that such a financial stability council already exists at the level of the NBR: "The Committee is definitely unconstitutional. What do we even need the parliament, the government and the ministers for, if we have this council? You can't hand over the country's laws to people who are not elected by citizens".

Economic analyst Florin Cîţu shares a similar opinion. He made the following statement, quoted by Digi24: "Apparently this committee is taking over and it can not only obstruct, but it can also impose decisions upon the government, in the name of macroprudential stability. (...) It cannot be audited by the parliament, it can't be audited by anybody, they are a bunch of technocrats that make decisions, and their recommendations are apparently obligations for the others".

The legislative project which stipulates the creation of the new Macroprudentiality Committee is set to be approved by the Parliament.