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Romania’s Over-Taxation To Enstrange Foreign Bks – Ctrl Bker

Applying a “Robin Hood” tax in Romania, namely the over-taxation of bank profits is not a right option as it would estrange foreign bank even more and would infringe free movement of capital rules, central bank’s chief economist Valentin Lazea said Friday.
Romania's Over-Taxation To Enstrange Foreign Bks - Ctrl Bker
22 mai 2009, 18:48, English

 

Lazea said an alternative solution would be that the Parliament to grant higher powers to the central bank in the relationship with banks.
 
If the Parliament agrees to the central bank’s proposal to allow it to change the banks’ management or, in extreme cases, even the shareholders, if they refuse the central bank request to recapitalize the lenders, a similar result would be obtained, Lazea said.
 
The interest rates are also set according to Romania’s country’s risk, directly related to rating agencies’ perception.
 
“Unfortunately, the interest depends very much on the view that other countries have on Romania’s risk, directly related to rating agencies’ perception. Correct or incorrect,” Lazea said.
 
Romanian Prime Minister Emil Boc said Tuesday the government would implement tougher measures, like over-taxing the profits obtained by foreign banks in Romania, if they do not keep their financing lines in the country, breaking thus the accord agreed in March in Vienna.
 
Later Tuesday, Boc said that the potential over-taxation of the profits obtained by foreign banks in Romania was mentioned as a sign that the government wants the money to remain in the country, adding the authorities count on the partnership inked with the lenders.
 
The parent banks of the main nine lenders in Romania will sign, in maximum 30 days, bilateral agreements with the National Bank of Romania on keeping the financing lines at the value from the end of March.