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January 27, 2023

Radu Ghetea, President of Romanian Banking Association (ARB): A voluntary restructuring of the banking system is necessary

In an interview for a daily, Romanian Banking Association (ARB) President and CEC Bank President Radu Ghetea expressed his opinion on a wide range of banking system issues.

First of all, we were told no Romanian bank was subjected to the European Central Bank’s stress tests. Romanian banks passed the AQR test conducted by the National Bank of Romania (BNR), with no worrisome problems being discovered. However, local banks will be subjected to an AQR test conducted by the European Supervisory Authority, probably next year.

Concerning the comments and events that would suggest a retrenchment of the banking system, Radu Ghetea was very clarifying: “I cannot afford to make any comment on other banks, neither as President of the Romanian Banking Association (ARB) nor as president of a commercial bank. However, it is clear that after this crisis (the economic crisis this decade – editor’s note) a phenomenon is taking place in the market – not of retrenchment of the local and European banking systems but of voluntary restructuring, one that banks are engaged in, a restructuring that unfortunately is starting to be increasingly poignant through regulations that could come from the European Commission and the European Parliament. I am talking about the “banking restructuring” operation, an idea that is increasingly discussed in the European Parliament and that comes up with all kinds of solution such as separating the retail side from the investment banking side.”

Radu Ghetea added: “There are all kinds of models – the British model, the German model etc. – each MEP has his own model. The European Parliament and the parliament of each state are democratic institutions in which every member promotes his own ideas. Unfortunately, some ideas that can do a disservice to the final goal, which is economic recovery, could be promoted. The position adopted by the European Federation of Banks, in which I represent Romania, but also my position as a banker, is that at one point one can have too much of a good thing. The moment we will have too many restrictions the appetite for crediting will drop too and the effect will be unwanted. I recently attended the latest meeting of the Administrative Board of the European Federation of Banks, and there it was decided that the Federation will adopt an attitude of constructive opposition. We will not go into the street, but we have to show what the effects of over-regulation and over-involvement in organizing the banking activity are. A great discomfort and a significant difference between the European banking system and Asian or American banking systems will be created. We will be over-regulated in comparison to the rest.”



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