The National Bank could help restore confidence on the lendingmarket by loosening the retail lending norms, to reinforce theimpact of rate cuts, said Dominic Bruynseels, CEO of BCR. Thecentral bank had tightened the lending regulations in the autumn of2008, when the financial crisis erupted.
"The NBR could help us by relaxing some of the measures itintroduced in October 2008. It was bad timing for dramatic changesin lending criteria, which coincided with the onset of the crisis.We are still working under that regime, and relaxing some of theregulations would help rebuild the clients' trust, together withthe burgeoning interest rate cut drive," says the head of thebiggest bank on the market.
In the autumn of 2008, the NBR was still concerned with slowingthe lending pace, believing Romania would not be too hard hit bythe international crisis, so that it forced banks to restrainaccess to loans.
As a result, the maximum borrowing caps were reduced, and manyclients no longer qualified. The NBR promised bankers to ease upthe norms, but has made no decision so far.
The respective moves probably prevented an even bigger increasein the number of bad loans, but also discouraged loan seekers,which precipitated the market decline.
Consequently, Bruynseels says the NBR could have a betterdialogue with banks and could cut red tape.
"I believe the NBR did a good job in the context of the crisis,despite taking a conservative approach. The banking system hasweather the crisis very well also due to this conservativeapproach, reflected in minimum reserves or provisioningrequirements, but now the NBR could help us by relaxing some of theconstraints it introduced in 2008," the BCR CEO told an eventorganised by ASEBUSS Business School, one of the oldest businessschools in Romania.
He believes banks should focus on reviving lending during thisperiod, but they should not be afraid of saying "no" to certainclients, either. Also, Bruynseels foresees many bankruptcies amongSMEs.
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