The SPI Romania Experience Public-Private Financial Modernization

1. The SPI Romania ExperiencePublic-Private Financial Modernization ALBANIAN ASSOCIATION OF BANKS Tirana, 28January 2008 Ramona Bratu Director for Bank Products and Services SPI Romania 1

2. 2007 Financial Sector Modernization Program

3. SPI Romania has adoptedthe EU Better Regulation Approach

4. What is SPI Romania? Catalyzed by the Convergence Program, Romanian financial authorities and market participants established a partnership in March 2006 to provide focus and coordination to accelerate modernization of the Romanian financial sector. Website: www.spi-romania.eu. Set-Up • 5-person SPI Committee High-level direction and endorsement • Many Public-Private Working Groups Recommendations to SPI Committee based on RIA analyses and consultations (about 120 experts in 2007) • SPI Secretariat Two persons for overall management and coordination 4

5. Why do we need this structure? SPI Committee: ex-ante agreement on public-private priorities and push for promptenactment of proposals • Ministry of Finance, Central Bank, Banking Association, Consumer Protection Agency Working Groups: to prepare solutions based on their collective expertise and facilitate public-private technical consensus SPI Secretariat: the “engine” of the structure

6. SPI Secretariat’s two roles • “Executive Project Manager” • Focus Projects • Convener, international benchmarking, analytical consensus-building, conclusions • Facilitator/Support • Projects run by either authorities or banking association • International Benchmarking needed • SPI Secretariat prepares background study for project working group consideration • Solution largely identified and understood • SPI Secretariat convenes public-private working groups and supports their meetings

7. SOLUTION ENDORSEMENT AND ENACTMENT SPI Committee Project Owner 1 Project Owner 2 Project Owner N … SPI Secretariat Project Manager 1 Project Manager 2 … Project Manager N SPI Working Group 1 (Experts from public and private institutions) SPI Working Group 2 (Experts from public and private institutions) SPI Working Group N (Experts from public and private institutions) … 7 SOLUTION FINDING (Based on public-private consultations through RIA)

8. 1. Issue identification and selection MEF NACP Banks SPI Secretariat RBA NBR SPI pipeline EU priorities, other countries, interviews, research projects of public-private interest SPI Committee – project approval SPI Projects

9. 2. Solution searching NBR RBA MEF NACP Other stakeholders -Experts for PWG -Support for data collection and consultations -RIA findings validation -Identifies the needed expertise • Searches for solutions in international experience /EU legislation - Identifies the needs for international/local consultants - Arranges for the consultants’ support - Prepares documents for discussions - Drafts RIA questionnaire (as part of the RIA) - Collects data and performs RIA calculations • Organizes seminars and other supporting events - Collects feedback from SPI stakeholders - Collects and aggregates individual contributions - Prepares documents presenting the solutions SPI Secretariat

10. 3. Consensus building NBR - Revises proposed solutions - Provides input on disputed issues - NBRBoard endorsement for final recommendation RBA - Banks review solutions - Provide input on disputed issues • RBA Board endorsement for final recommendation SPI Secretariat - Looks for international benchmarking in disputed solutions - Asks for independent opinions on disputed issues - Provides ideas for reaching solutions acceptable to all parties • Performs RIA for disputed issues in order to facilitate the best choice

11. 4.Solution enactment SPI Secretariat -Prepares the law / regulations enactment packages • Prepares SPI Committee letters to the legislative initiator or to the NBR Board for NBR regulations • Provides detailed description of RIA to the legislative initiator or to the NBR Board • Follows up with the legislative initiator • Notifies NBR on the initiation of the public consultation process • Sends SPI Secretariat submission under the public consultation process • Arranges and/or attends the meetings with institutions involved in the enactment process • Prepares other documents as required by the legislative initiator

12. Volume Impact (% of 2007 target) 76% 99% 90 5. Monitoring Results 80 Databases 82% 73 Financial Impact of Finalized SPI Projects (Mln, EUR) – First Full Year IFRS 70 Bank Ombudsman Rural Lending 60 AML Debit Instruments 50 Cost Savings July 40 Cost Savings Impact (% of 2007 target) March 30 Positive Information 20 December 2006 10 Law on Safety 0 236 182 134 0 170 220 240 Additional Lending Volume

13. SPI Romania 2007 – costs/benefits analysis

14. The 2008 Program Tackles A Large Modernization Front

15. SPI Romania – RBA partnership • SPI has strengthened banking sector influence on accelerating modernization • Tight project management and analytics • Public-private convening power • Interface with real sector (consumers, rural, etc) • Enactment monitoring with MEF-NBR • RBA has supported SPI • Access to banking sector expertise • Image, institutional and advocacy activities • 2008 Program challenges • More projects (from 10 to > 20) • Stronger banking sector mobilization • More results • Stronger RBA support in enactment monitoring

16. Banks contribution to SPI PWGs in 2007

17. SPI Romania Partners • National Bank of Romania • Romanian Banking Association • National Authority for Consumers Protection • Ministry of Economy and Finance • Ministry of Agriculture and Rural Development • Ministry of Interior and Administration Reform • Anti-Money Laundering Office • TransFonD • Credit Bureau • National Authority for the Supervision of Personal Data Processing • Rural Credit Guarantee Fund • Grading Commission for Comestible Seeds • Romanian Commodities Exchange • Romanian Stock Exchange • National Securities Comission • The National Association for Consumers’ Protection and Promotion of Programs and Strategies from Romania • Italian Banking Association • OECD • International Finance Corporation • World Bank • Raiffeisen Bank • Raiffeisen Banca pentru Locuinţe • OTP Bank • Banc Post • CEC • BCR • Alpha Bank • BRD-GSG • UniCredit Ţiriac Bank • RIB Romanian International Bank • Credit Europe Bank • ING Romania • Citibank • ABN AMRO • ATE Bank Romania • Coface Romania • Cargill • KPMG • Deloitte • Clifford Chance • Algoritmics • Bearing Point • Financial Ombudsman Service, UK • Goodwood Financial Consulting

18. Final Message SPI structure well designed to meet current SEE modernization needs • Wider range of bank products and services would spread finance more evenly – and support more balanced economic growth, but… • Financial authorities focus on priority prudential issues • Banking associations ineffective in coordinating modernization initiatives • SPI Committee promotes win-win modernization solutions • Banks-authorities-consumers • SPI Secretariat carries out several modernization projects in parallel • Predominant use of domestic public & private expertise • Foreign consultants only when strictly necessary • Focus: to achieve results quickly & avoid unintended consequences! 18

19. The SPI Adriatic Vision Adriatic Romania Albania Montenegro Kosovo? Macedonia? Serbia?

20. To Build The SPI Adriatic Network! Kosovo SPI Macedonia SPI Albania SPI Montenegro SPI Adriatic SPI Romania SPI Serbia?

21. For more information see www.spi-romania.eu Thank you! 21