The decision adopted by the monetary authority of Switzerland took into account the fact that the floor – implemented in September 2011, when the Swiss franc was substantially overvalued against the euro – had become increasingly difficult to keep in place given the quantitative easing initiated by the European Central Bank and the significant capital inflows into Switzerland. The CHF appreciation against the leu was inevitable, even if the domestic currency had a relatively stable evolution against the reference currency (euro). The literature refers to the Swiss franc as a safe haven currency. Owing to the small size of the local financial market, against the background of foreign capital inflows, the Swiss franc tends to strengthen significantly versus other currencies in times of turmoil on international markets. The measures the National Bank of Romania can take in order to influence the exchange rate of the domestic currency against the Swiss franc are limited. The CHF/RON exchange rate is set indirectly. The euro is Romania’s reference currency on the FX market, given the intensity of the country’s trade with euro area states, the EU membership and Romania’s intention to adopt the euro in the future. The EUR/RON exchange rate is the result of the foreign currency demand and supply generated by trade and financial flows, while the CHF/RON exchange rate is determined indirectly depending on the EUR/RON and EUR/CHF exchange rates.
Based on the examinations and assessments it undertakes, the NBR ascertains to what extent the management framework, the strategies, processes and mechanisms implemented by a credit institution ensure the proper management of risks given the particular risk profile of the credit institution. Thus, the supervision carried out follows the risk-based approach rather than the compliance-based one. In exercising its supervisory task, the NBR issues recommendations, adopts measures and imposes sanctions on the credit institutions themselves or on their executive and governing bodies in order to ensure that the proper remedial measures are adopted and compliance with the regulations in force is restored. D.  Implementation of recommendations of the European Systemic Risk Board (ESRB) on lending in foreign currencies  At EU level, the first recommendations on lending in foreign currencies were issued by the ESRB in 2011 (with implementation deadline in December 2012). The recommendations were not aimed at banning foreign currency-denominated loans by way of administrative measures, but at setting forth measures that would ensure borrowers have the capacity to service their debt even in the context of adverse developments. With some of these recommendations already regulated, the NBR supplemented the national legislation with the required provisions. Following up on the action steps of the Romanian authorities, the ESRB concluded that the aforementioned recommendation had been fully implemented by Romania.