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BNR will keep prudential filters regarding bank provisions and in 2013, Ion Dragulin says
The National Bank will keep its policy of prudential filters and in 2013, what regards the bank provisions, in the context of harmonisation with international standards of accountancy (IFRS) stated, on Friday, the manager of the Department for Financial Stability in the BNR, Ion Dragulin. We need a smooth change to IFRS. The year of 2013 is the second year where we keep the prudential filters regarding provisions, Dragulin explained.
After getting to IFRS on 1 January 2012, the solvency indicator in the local banking system would have gone up by approximately 4 percentage points from almost 14% as it was at the end of December 2011 to the level of 18%, if prudential filters had not been applied, and the level of the provisions would have been smaller’ he explained.
The BNR official showed that, in order not to issue important sums of money from the provisions made by banks, by the simple passing to the new accountancy system (IFRS) –if the level of non-performance is kept the same – BNR introduced prudential filters to limit the provision issuing.
Dragulin reminded that this aspect is included in ‘The report on financial stability’ for 2012 of the BNR;which keeps that, with a view to taking a decision with regards to the m aintenance of prudential filters and after 1 January 2013, an analysis was made to determine the impact of their implementation.
The analysis was made on the basis of data available for 31 December 2011 and 31 March 2012 respectively and concentrated on the impact made by the introduction of filters on the solvency indicator the credit institutions.
According to the document, there were determined the values corresponding to the solvency indicators in the absence of prudential filters, with a view to comparing them to those determined according to regulations in force. Thus, the differences between the two treatments were established. The indicator of solvency for the month of December 2011 and March 2012, determined with taking into consideration the adjustments for depreciation, calculated according IFRS recorded a superior level to that calculated in the conditions to apply prudential filters ( with 3.9 percentage points in December 2011, 4.1 percentage points respectively in March 2012, the difference being relatively constant).
According to BNR, the level determined for the provisions for December 2011 according to IFRS is 18.75 percent, against 14.85 percent by the use of prudential filters, and for March 2012 is 18.74 percent ( against 14.63 percent).
Ion Dragulin participated at the seminar EU-COFILE 2012 organised in Sinaia by Alpha Bank, BNR and the Romanian Association of Banks (ARB).