I. INTRODUCTION - PURPOSE OF THIS MEMORANDUM

Bank of Greece and National Bank of Romania, hereinafter referred to as "the Parties", expressing their mutual interest in establishing and promoting bilateral ties in banking supervision and wishing to achieve a common understanding on issues related to banking regulation in order to facilitate cooperation in supervising the activities of credit institutions, have agreed as follows:

II. LEGISLATION IN FORCE

This Memorandum is signed by the Parties in accordance with:

• the Greek legislation in force in the field of banking supervision
• the Romanian legislation and regulations in force in the field of banking supervision
• the provisions of the Banking Directives of the European Union, the standards set by the Basle Committee on Banking Supervision, as well as any other act that may be useful for the purposes of this Memorandum, provided that all such acts do not contradict the above national legislation of the two countries.

III. DEFINITIONS

For the purposes of this Memorandum:

• "countries" are Greece and Romania;
• the "banking supervision authorities" are Bank of Greece and National Bank of Romania;
• a "credit institution" (a bank) is an entity which carries on banking business (general or specialized), is recognized as credit institution in accordance with the national legislation and whose activities are subject to licensing and banking supervision under the laws of the countries: and
• "supervisory information" is the information received or obtained in the process of fulfilling their supervisory functions, as well as through the exchange of information or through the conduct of on-site inspections in accordance with this Memorandum, by either of the banking supervision authorities. Supervisory information shall not include information about transactions, accounts, and deposits of customers, in accordance to the relevant provisions of either of the national legislation.

In accordance with definitions used by the Basle Committee on Banking Supervision and the E.U.:

• a "branch" of a credit institution (a branch) is an operating entity which does not have a separate legal status and is thus an integral part of a credit institution incorporated in one of the countries;
• a "subsidiary credit institution" (a subsidiary bank) is a legally independent institution, wholly-owned or majority-owned, by a credit institution which is incorporated in the country other than that of the subsidiary;
• a "representative office" is an office through which the interests of a credit institution are promoted or assisted but at which no banking business is carried on; and
• "home country" is the country of incorporation of a credit institution that has set up a branch or a subsidiary bank or a representative office in the other country ("host country").

IV. COOPERATION IN THE FIELD OF BANKING SUPERVISION. EXCHANGE OF INFORMATION

1. To maintain reliability and efficiency of the national banking systems, the Parties shall co-operate in the banking supervision of the activities of credit institutions on the basis of the provisions of this Memorandum, subject to the national legislation and the international obligations of each Party.
2. The Parties express their readiness to regularly exchange information on the state of each other's banking system and the development thereof, with regard to the presence of one country's credit institutions (branches and subsidiaries) in the other country.
3. The Parties shall regularly provide, on a reciprocal basis, information on the applicable national banking legislation and regulations, banking supervision standards and requirements, and any major changes in them.
4. The Parties agree to hold, if necessary, meetings between them to discuss issues of mutual interest related to their respective tasks on the basis of this Memorandum and ways to improve banking supervision over the activities of credit institutions within their respective jurisdictions as well as issues of general interests.
5. Co-operation within the framework of this Memorandum shall be implemented at the initiative or on the basis of requests for assistance in banking supervision from either Party.
6. A request for assistance shall be made in writing. Contemporary means of telecommunication may be used to transmit a request.
7. A request for assistance within the framework of this Memorandum may be denied wholly or partially, if the requested Party believes that the fulfillment of the request will run counter to its national legislation or that it may harm important national interests. In such cases, the requesting Party shall be notified about the denial and given the reasons for it in writing.
8. The Parties shall take all necessary measures in order to provide a prompt and as full a reply as possible. They shall also notify one another about the circumstances preventing or delaying the fulfillment of a request for assistance.
9. Each Party shall independently bear the expenses involved in the implementation of this Memorandum, unless a different procedure is agreed upon.

V. LICENSING PROCEDURES

In licensing banking activities, the Parties agree that:

1. If a credit institution incorporated in one of the countries applies to the Party in the other country for a license (permission) to open a branch, a subsidiary bank, or a representative office, the other Party shall consider such application within the time-limits, subject to compliance with objective and non discrimination criteria applied to credit institutions operating in their countries and in accordance with the procedures established by its national banking legislation or regulations;
2. The Party receiving an application, as referred to in V.1 above, shall notify the other Party of the details of such an application and obtain the other Party's prior consent as provided by the rules established by the E.U. and the Basle Committee on Banking Supervision; and
3. The Party receiving an application shall notify the other Party in writing about its decision with regard to the granting of license (permission) to a credit institution to open a branch, a subsidiary bank, or a representative office, which has applied to it, as provided in V.1 above.

VI. OFF-SITE SUPERVISION

In exercising off-site supervision through collecting information and examining and analyzing financial and statistical reports submitted by branches, subsidiary banks, or representative offices set up in one country by credit institutions incorporated in the other country, the Parties agree that:

1. The banking supervision authorities of the host country shall exercise prudential supervision over the activities of branches, subsidiary banks, or representative offices in accordance with the national banking legislation or regulations; and
2. The banking supervision authorities of the host country shall not prevent the entities mentioned in VI.1 above from submitting information and other reports to their Head Office or parent banks necessary to compile consolidated reports in accordance with the forms established in the home country, provided that such information shall not include the names of depositors.

VII. ON-SITE EXAMINATIONS

Should it become necessary for the Parties to conduct on-site inspections:

1. The banking supervision authorities of the home country shall notify the banking supervision authorities of the host country about their intention to inspect a branch, a subsidiary bank, or a representative office, giving details of the names of examiners and examination expected duration. The banking supervision authorities of the host country shall express readiness to provide, at the request of the other Party, any available supervisory information related to the conduct of on-site inspections;
2. The banking supervision authorities of the host country shall not prevent the banking supervision authorities of the home country from carrying out on-site inspections, as referred to in VII.1 above, and shall give the banking supervision authorities of the home country access to supervisory information, as defined in section III, which they may need to conduct banking supervision:
3. Representatives of the banking supervision authorities of the host country have the right to be present during the on-site inspections conducted by the representatives of the banking supervision authorities of the home country.

VIII. INFORMATION CONCERNING SUBSTANTIAL CHANGES

In connection with the supervision of the credit institutions incorporated in one country which have branches, subsidiary banks, or representative offices in the other country, the Parties agree to provide, on a reciprocal basis, information about any events that have the potential to jeopardize the stability of the activities of a credit institution having operations in the country of one of the Parties, as well as substantial changes pertaining to such credit institutions such as restrictions to the range of permitted banking operations, suspension or modification or revocation of a license, appointment of a provisional administrator, and re-organization or liquidation of any such credit institution.

IX. PROFESSIONAL SECRECY

1. Each Party shall always ensure the confidentiality of supervisory information and documents received from the other Party for the discharge of its supervisory tasks, if such information and documents are not to be made public or if the Party that has provided them does not want them to be made public. The extent of the confidentiality of supervisory information and documents shall be determined by the Party that provides the information and documents.
2. Supervisory information received shall not be used without the consent of the Party that provided it for any purposes, other than those for which it was requested and provided.
3. No supervisory information received by either Party in accordance with this Memorandum shall be passed to a third Party without the prior consent of the Party that provided the information.

X. OTHER ARRANGEMENTS

1. The Parties undertake to revise the present Memorandum in the light of future developments in national legislation which may directly or indirectly be related to the principles defined in this Memorandum.
2. The Memorandum shall be changed or amended only in writing with the signatures of the Parties.
3. The Memorandum shall come into force as of the date of its signing by both Parties.
4. The term of this Memorandum shall be considered automatically extended for each subsequent calendar year unless either Party submits a notice of termination by the end of each year.
5. This Memorandum is signed on January 24, 2003 in Bucharest, in two copies in English, both copies being equally original.