16.5 C
May 18, 2022

IBR: The banking system is going through hard times

Hard times are coming for the banking system and crediting will never be what it was in the last years, the President of the Romanian Bank Institute (IBR), Petru Rares yesterday told a pres conference in Targu Mures. According to the IBR official, the banking system is confronted with less positive economic development expectations, which prepare adjustments by the trade and economic community. “Most likely we’ll never return to what has been in the past, because what happened in the past was possible on the grounds of an unprecedented evolution of the world financial economy, which produced an affordable and abundant liquidity, which was not justified by the dimension of real economy.

The abundant liquidity created by securitizations and derivatives – products that intoxicated the large majority of bank and financial systems in the world – will no longer be produced in the future. The era of the exuberant consumer society has ended,” stressed the IBR president, quoted by Agerpres. He added that the resumption of crediting will only be made at sustainable levels, “as long as one has deposits, as one has credit lines form mother banks.” On the other hand, Rares pointed out that the Romanian banking system is in an “extremely sound” situation in terms of financial stability. Petru Rares said the minimum of solvency stands at 8 p.c. toward credit exposures, while solvency in the Romanian banking system exceeds 12 p.c. The European payment system (SEPA) will reduce commissions to a minimum, including those on cash withdrawals, he added. “The European Union, within the SEPA system, will lower commissions, in general, to a minimum. Both at European scale and in Romania, we will witness a reduction of withdrawal commission at a large, very large scale,” Petru Rares said.

The IBR president explained that each employee has the right to negotiate and may ask for getting his salary in cash, rather than on card, and many Romanians are already asking to receive their wages in cash. The bank official said there is a trend toward increasing the cash in circulation and reducing the cash withdrawals from ATMs, but the European payment system that is being developed will lower commissions to a minimum, by European law.

Related posts

Basescu: Public sector unprepared for eurozone

Nine O' Clock

Syrian crisis lifting crude oil costs

Nine O' Clock

ROCA X moves fast to back up XVision’s international expansion through a bridge round