Ordinance 50 on loans is not retroactive, but banks should notbe "punched in the plexus" by applying the new rules to existingloans, as well, even if "there were excesses when granting some ofthe loans," says NBR governor Mugur Isărescu. "I think we don'treally want to have a banking crisis in Romania just for the sakeof seeing how many of these extra costs banks can bear," said thehead of the NBR at the "20 Years Later" show broadcast on Pro TVyesterday. On the other hand, he agrees banks boosted interestrates and have not helped the economy. Even so, he says there is a"calculated probability" that, starting in the winter of 2010-2011,a sustainable, "relatively sound" economic growth could emerge.Isărescu specified, however, that it takes at least one year fromthe time recovery starts until it is felt in terms of livingstandards.
On another note, Isărescu added the Romanian banking system was notworking as a cartel, but also not functioning very smoothly, andwas is under pressure from the uncertainty of the local market andfrom the "unending" talks on the political and social scene.
"I don't think the Romanian banking system functions as a cartel.Admittedly, it is not working very smoothly, and is itselfpressured by the uncertainties in this country and by the unendingtalks on the political and social scene. All these uncertaintiestranslate into extra costs," Isărescu said on the "20 Years Later"show broadcast yesterday on Pro TV.
Asked what the NBR was doing, how it pressured banks to cutinterests, Isărescu said: "Can't you see what we are doing?! We aredoing certain things for which we are criticised or misunderstood,to put it delicately. For instance, we are leaving more cash ontothe market."
He admitted the measures taken by the NBR to cut interest rateswere not working, but does not believe this is because the systemworks as a cartel or as a monopoly.
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