Apart from the adverse economic effects, the NBR’s intervention to help the domestic currency appreciate against the CHF to a level similar to that recorded prior to the Swiss National Bank removing the 1.2 EUR/CHF floor would also impact public policy. Such an intervention would result in changing the benchmark currency on the foreign exchange market from EUR to CHF, contradicting not only the economic reality, but also the EU membership legally binding Romania to adopt the single currency at a certain point in time. As for the possibility of the NBR imposing a ban on CHF-denominated loans, such a decision would have entailed the restriction of CHF-denominated capital flows, thus violating one of the fundamental prerequisites of Romania’s accession to the EU: full capital account liberalisation, completed in 2006. Besides, even assuming such a measure had been possible, it would have affected trade with and investment from Switzerland, as well as the financing of CHF hedged borrowers (exporters, as well as employees of companies with Swiss capital, whose incomes are expressed in CHF). The relevant presence of Swiss capital in Romania is pointed out by the direct investment from Switzerland, which totals around EUR 2 billion, as well as by the number of companies with Swiss capital (over 2,000). These companies’ annual turnover is worth about EUR 7 billion, while the number of employees has ranged between 50,000 and 60,000 (nearing the number of CHF borrowers).
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.