Tariceanu: Romanian financial system not connected to American one

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Premier Calin Popescu Tariceanu says that the problems affecting the American financial system will not have repercussions upon the Romanian financial one because the two are not connected.
 
Answering a question on September 15 if he expects that the American financial system’s problems, to which the international bourses have already reacted, would produce effects on the Romanian market and if he was going to hold consultations on this topic with Romania’s National Bank and the Banks Association in Romania, the Executive’s head gave a negative reply.
 
„Fortunately, the Romanian financial system is not strongly, nor even weakly, linked to the American one, there are no influences from this point of view. In my opinion, these fears have no support”, said Tariceanu.
The fourth-largest US investment firm Lehman Brothers Holdings Inc. filed for bankruptcy protection on September 15 according to chapter 11 of this law, AFP informs, quoting a New York bankruptcy tribunal spokesperson.
The spokesperson failed to provide further information on the ongoing procedure.
 
Previously, Lehman Brothers announced in a press release that it was going to file for federal bankruptcy protection in US Bankruptcy Court in order to protect its assets and to maximize its value, after negotiations for finding a buyer has failed.
Lehman Brothers announced net losses of 3.9 billion dollars in Q3 of this year after it recorded asset depreciations in the value of 7.8 billion dollars at the level of its real estate credit portfolio.
 
Chapter 11 of the American bankruptcy law allows a company with financial difficulties to continue to function normally, granting it the needed time to reach an agreement with its creditors. Placing under Chapter 11 protection can be asked for either by a company in difficulty, or by its creditors.
The procedure demonstrates the company’s restructuring desire, under the court’s control.
 
This procedure is significantly different from the one provided by the Chapter 7 of the same law, which involves the company ceasing its activity. In this case a judiciary administrator is appointed in order to sell the assets and to organize the repayment of overdue credits to the lenders. In exchange, Chapter 11 allows a debtor placed under protection of this chapter to remain in possession of all its assets and to oppose its creditors’ requests. In return, the procedure constraints the firm to regularly inform the court for bankruptcies over the way its relations with creditors evolves.
 
In the past years several big American companies have filed for the placement under the
protection of Chapter 11 of the bankruptcy law, such as air companies United Airlines, US Airways, Delta Air Lines and Northwest, energy company Enron, telecommunications group WorldCom, distribution group Kmart or auto equipment producer Delphy.
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