| EFFECTS OF THE ECONOMIC CRISIS ON THE BANKING SYSTEM 05/03/2009 |
| (2009-03-05) |
| Last updated: 2009-03-06 16:20 EET |
The governor of the National Bank of Romania, Mugur Isarescu, has warned at a meeting with President Traian Basescu and the representatives of the economic and financial sectors that the current economic crisis has not hit rock bottom yet.
Proof therefore is the global economic growth forecast, adjusted downwards by the main financial institutions. The effects of the crisis have not been strongly felt in Romania yet, says Mugur Isarescu:
''There is this danger that while fighting over economic targets, we might overlook the characteristics and particularities of the impact of the economic and financial crisis on Romania. In other words, when the strong and inevitable effects of the international financial and economic crisis hit Romania, we might be already tired.''
The good news, however, is that the Romanian banking system is solid and able to further finance economy. According to the Central Bank governor, parent banks from abroad have pledged to resume financing of their Romanian subsidiaries by over 90%. On the other hand, Isarescu believes that the possible foreign loans Romania might resort to, might, temporarily, make up for the relatively low EU fund absorption capacity; this money should be paid back by means of EU funding, through structural and cohesion instruments.
The Bucharest government has pledged to fight the crisis through major public investment, aimed at ensuring jobs and keeping economy on track, though its pace will inevitably slow down. As regards economic growth, the Romanian president continues to be optimistic and ignores the foreign pessimistic scenarios that see Romania falling into recession. Traian Basescu:
“I'm still optimistic, despite negative forecasts regarding Romania's economic growth next year; I’m encouraged also by the fact that banks are able to finance economy. I further support the 1.5 to 2% economic growth forecast, in spite of the pessimistic scenarios backed by some who look at us from outside.''
Basescu warned that both companies and individuals must be cautious when taking out loans, and they should pay their instalments on time, in order to protect the banking system. Concerned about the growing number of unpaid loans, the head of state has suggested that the state might start taking action against those who fail to reimburse their loans deliberately.
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2025-04-03
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