The Romanian capital market needs to be given some lessons and receive clear signals suggesting that the laws and regulations in power, either good or bad, are being enforced, said Stilpon Nestor, chief of the corporate affairs division within the Organisation for Economic Development and Co-operation (OECD).
Nestor says that there is no such thing as perfect legislation, but credibility is vital for the legislative system and the institutions. "As long as the companies look and see that the law is not working, they will not change their behaviour toward their business partners and the state," Stilpon Nestor told Ziarul Financiar.
The OECD representative says that the shift in attitude should start with watching the way legislation is being enforced by the courts. The capital market needs a credible overseeing institution in order to be more credible itself.
"It is essential that the CNVM (the National Securities Commission) should gain credibility. To attain this goal, it needs resources and highly-educated people protecting its independence," Stilpon Nestor said.
He estimates that only such an institution can enforce discipline on the capital market. "Several serious cases where the sanctions stipulated by the law are enforced would really work miracles," the OECD representative said.
Nestor considers that the Romanian capital market should now focus on a small number of companies issuing shares, which are important and active on the market, while the others should be delisted.
"The national companies should be a listing priority now in order to attract the necessary funds," Stilpon Nestor said.
To attain this goal, the state should clearly separate its position as a shareholder of the respective company from involvement in the company's management and create the tools needed for tight control over the management team in order to gain the investors' confidence.
Despite reforms, the management of national companies is still politically subordinated and inefficient, the authors of the OECD survey say.
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