BIS central bankers’ speeches  7  E.  Public warnings  In the past decade, the NBR has constantly issued public warnings regarding the risks related to foreign currency loans, including CHF-denominated loans, taken by individuals earning incomes in currencies other than the loan currency. These recurrent warnings were disseminated via several communication channels: studies, conferences and seminars on financial stability and supervision issues, legal colloquia (available on the NBR’s website), statements made by central bank representatives during the quarterly press conferences, monthly meetings with the representatives of the Romanian Banking Association and other specialised associations (Association of Financial-Banking Analysts in Romania, National Association of Romanian Exporters and Importers, etc.). Most warnings were issued concomitantly with the release of prudential norms and/or restrictions by the NBR. We hereby underline that these activities are current and permanent, and are reported in the Annual Reports and the Financial Stability Reports published on the NBR’s website. V.  Other countries in the region – approaches to the situation caused by CHF appreciation  The measures taken by other EU Member States to deal with the challenges posed by CHF-denominated loans show that the solutions were different relative to the particular features of such loans in each country. Therefore, Romania must identify solutions that would fit its own situation. To cherry-pick the favourable components of the measures taken by other countries without revealing the context and the associated costs would be counterproductive.

In line with new framework, banks establish maximum indebtedness levels by category of customers based on internal lending norms, by observing the risk profile and strategy assumed by banks in relation to borrowers’ financial capacity. These caps are subject to prior validation by the central bank. •  In February 2008, stricter requirements were applied for the provisioning of foreign currency-denominated loans granted to borrowers earning incomes in currencies other than the loan currency. •  In August 2008, the regulation on lending to households was amended so that banks were required to determine borrowers’ indebtedness levels in such a way that the debt service might accommodate the materialisation of currency and interest rate risks, as well as higher fees and commissions, over the entire life of the loan. On the same date, the legal provisions were supplemented by imposing the use of the borrower’s annual tax record instead of the monthly income certificate throughout the income validation process. •  In October 2011, the NBR introduced additional restrictions on foreign currencydenominated loans to households, consisting in stricter requirements on establishing the maximum indebtedness level allowed for consumer loans, loan collateralisation, etc. C.  Prudential supervision  Prudential supervision of credit institutions is one of the NBR’s main tasks, according to the law. To this end, the NBR is empowered to check, based on reports and on-site inspections, the compliance with legal provisions and with the NBR regulations in order to limit and prevent risks specific to the banking activity.