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Wednesday, 31 May, 2000, 23:39 GMT 00:39 UK
Bank crisis 'threat' to Romania
At the bank
Romanian authorities have tried to play down the fears
Romanian officials have said national security has been threatened by the sudden loss of public confidence in the country's largest state-owned bank, the Commercial Bank.

Members of the Supreme Defence Council met to discuss what the government said was an orchestrated conspiracy to undermine Romania's economic and political stability.

No details have been disclosed of the measures taken in response.

Police are already investigating what caused thousands of people to rush to withdraw their savings from the bank.


Police struggle to hold back bank customers on Tuesday
Police struggled to hold back bank customers on Tuesday
Several Romanian newspapers have blamed former agents of the Communist-era secret police, the Securitate, for spreading rumours that the bank, which is about to be privatised, was about to collapse.

The BBC's Central Europe reporter, Nick Thorpe, says the affair has come at the worst possible time for Prime Minister Mugur Isarescu.

He has just returned from a trip to the United States, where he'd been trying to inspire international confidence and investment in Romania.

IMF loan

The International Monetary Fund has delayed a decision on a $110m loan release to Romania because of the country's banking problems.

An existing loan, which was due to expire on Wednesday, will be extended by just a week, the IMF said.

A spokesperson said the extension was aimed at giving Romania time to formulate a policy response to its current financial turmoil.

An IMF board meeting is scheduled to take place in the next few days.

Fund closed

Earlier this month, operations stopped at a smaller bank, and then at a big investment fund, Fondul National de Investitii, which led to a senior official being accused of fraud.


Riot police and private fund investors in Bucharest
Riot police were deployed after the FNI crisis
As money as 300,000 people are believed to have invested in the fund, a private, high-risk plan promising rapid returns.

The crisis at Fondul National de Investitii sparked demonstrations and protests in many areas.

The government has proposed a package of laws to regulate the affairs of the country's many lucrative but risky investment schemes.

Romania remains one of Europe's poorest countries, with an average wage of less than $100 a month.

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See also:

30 May 00 | Europe
Panic at Romania's biggest bank
31 May 00 | Europe
IMF delays Romania loan
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