the eu entry and a few years before the outbreak of the global crisis, the national bank of romania faced an economic and financial context that could be deemed as exceptional. massive capital inflows occurred given the existence of a significant interest rate differential and abundant global liquidity, in the context of the gradual removal of capital controls due to the requirements of the forthcoming eu membership. this led to a rapid rise in forex credit, a sizeable nominal appreciation of the domestic currency, and booming domestic demand. in this case, trying to cool down the economy through the standard recipe of policy rate hikes would have been pointless, if not outright detrimental, by prompting even more capital inflows and nominal appreciation, thus creating a vicious circle. so the context called for the use of unconventional instruments. such departures from conventional practices involved the full use of direct fx interventions, allowing market interest rates to fall significantly below the policy rate through liquidity management, the active recourse to reserve requirements and deploying administrative measures to control credit growth. to give you just a few examples, they involved enforcing a maximum loan - to - value ratio, introducing debt service ceilings relative to households ’ monthly disposable income ( the scope of which was subsequently expanded to include non - bank financial institutions engaged in lending ), setting limits to banks ’ forex exposure vis - a - vis unhedged borrowers, and using differentiated coefficients in stress tests ( higher for eur than local currency exposures, with even stricter coefficients for chf - and usd - denominated credit ). these measures were efficient, at least to some extent. although sometimes circumvented by banks, they have managed to slow down forex credit growth, providing a wise solution to the problems faced at that time by our economy. back then, we referred to them as unorthodox monetary policy measures, but after the crisis, the imf mentioned the national bank of romania as being among “ the pioneers ” of what later became “ macroprudential instruments ”. after the eu entry, the actual membership in this “ convergence club ” has fueled and enhanced 3 / 5 bis central bankers'speeches the catching - up process. being in the eu meant free exchange of goods and services, along with the free movement of capital and labor, which increased trade, foreign direct investment, and migration flows, for the benefit of economic growth in our country. moreover, in the long run, eu membership fostered convergence

mugur isarescu : integrated supervision opening speech by mr mugur isarescu, governor of the national bank of romania, at the seminar “ integrated supervision ”, jointly organised by the romanian financial supervisory authority and the national bank of romania, sinaia, 22 january 2014. * * * distinguished guests, ladies and gentlemen, it is a pleasure for me to warmly welcome you to this seminar on integrated supervision. the newly established romanian financial supervisory authority and the national bank of romania decided to jointly organize the conference on this challenging topic that has recently come into the spotlight. i particularly want to thank our guests from the national supervisory authorities of austria, the czech republic, germany, poland, united kingdom and ireland. i also welcome the experts from the world bank, the international monetary fund and the european commission who will generously impart their knowledge to all of us. i do wish all of you a pleasant stay here in sinaia. this three days long seminar is an excellent occasion to learn, to exchange views and to generate professional ties. allow me to say a few words about where you are. this is a premise of the national bank of romania ’ s training center, situated in cumpatu district, in this lovely resort, sinaia. the name sinaia is an eponym of mount sinai. by the end of the 17th century, a group of wallachian monks, led by mihail cantacuzino, a landlord of those times, went on a pilgrimage to palestine and the sinai peninsula. they were hosted at saint catherine monastery. once returned, they established a convent quite here, in the heavily forested area, at the bottom of the carpathians. the new monastery was called sinaia, in the memory of their journey to the sinai peninsula. a century later, the first king of romania, carol i fell in love with the place and built peles castle, his summer residence. following the establishment of the peles castle a railroad connecting the capital to the king ’ s new summer residence was built. little by little, sinaia became popular among the members of the high society : they started building summer residences as well as hotels, villas. you can visit the peles castle and the sinaia monastery on friday. and now about this seminar. the topic of this seminar is integrated supervision to ensure financial stability. it relies on several conceptual layers. first of all, to understand that the frontiers among financial activities have been blurred by financial innovation and the formation