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April 16, 2021

Central Bank and Finance Ministry “battle” over forex-denominated loans issue

BNR Governor: Nobody can ask us to grossly break the law


The National Bank of Romania (BNR) is not legally allowed to intervene in contractual relations between clients and banks or to supervise every loan, the Central Bank’s mandate being of precautionary supervision of banking institutions, BNR Governor Mugur Isarescu stated on Monday at the conference in which the quarterly inflation rate report was presented.

“We are not legally empowered to intervene in the contractual relations between clients and banking institutions. It would be a mistake! Contracts are not trampled on anywhere in Europe. (…) Nobody can ask us to grossly break the law out of empathy (for clients with CHF-denominated loans – editor’s note),” Isarescu stated.

According to him, BNR does not have legislative initiative, however Parliament can initiate and approve a law that would make it possible to intervene in a private contract, but it would have to do so while accepting the risks generated by such an action.

The BNR Governor warned that the Central Bank’s interventions in the case of CHF-denominated loans appeared among other things as a result of the fact that the CHF was publicly labelled as a “toxic currency.” “There are more than 100,000 holders of CHF in Romania and they are not saying that they have toxic currency in their pockets or bank accounts,” he emphasized.

Mugur Isarescu added that his interventions also targeted “speculations” such as those claiming that the persons that contracted CHF-denominated loans were “baited” or “lured” to do so.


Finance Minister meets banks to discuss CHF crisis


Finance Minister Darius Valcov met on Monday evening the representatives of 8 banks in order to discuss possible solutions to the crisis of CHF-denominated loans.

“Talking with the Prime Minister, we decided that today (Monday – editor’s note) I should have talks with the 8 banks that offered Swiss Franc-denominated loans and the solution we will reach will be presented by me tomorrow within the Lower Chamber’s Commission where both I and the representatives of the National Bank will be present in order to identify the options we propose in order to overcome this crisis,” Valcov stated during a press conference in Parliament.

After the National Bank of Switzerland decided on January 15 to allow the CHF to float freely, the RON lost approximately 16 per cent against the CHF, reaching a historic low of RON 4.3287/CHF. On January 23 the Swiss Franc reached a historic high of RON 4.5817/CHF.

In this context, the issue of the Romanians that have CHF-denominated loans, the authorities putting their number at approximately 75,000, resurfaced in Bucharest.

One of the solutions is to restructure the loans, a solution stipulated by Ordinance 46/2014 according to which physical persons can benefit from the lowering of the monthly instalment by up to 35 per cent for a maximum period of two years, and from fiscal facilities.

Another solution proposed is that of converting the forex-denominated loans into RON-denominated loans, at an exchange rate that may surpass the exchange rate in force at the time the loan was contracted by no more than 20 per cent and without supplementary costs for the client.


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