Lending pace will slow 25% next year ľ Negritoiu said

Lending growth pace will slow down 25%next year, compared to 60% threshold in early months of this year, said on Friday ING Bank Romania’s managing director, Misu Negrotiu.

“Lending growth pace in economy will slow 25% from 60% in this year’s early months. Probably we will all live in smaller houses, people will buy less cutting-edge cars, motorcycles or expensive clothes,” Misu Negrotiu pointed out.
Rising lending growth pace together with fast economic growth in the last period, spark economic pullback, managing director of ING Bank Romania added: “The core issue is both the mounting lending and economic growth,” Negritoiu said.

As for interbank lending, ING’s managing director said the resources will grind down to a shortage, and their price will spark, considering the international gloomy context. However, he believes there is a higher volatility of Romanian banking system.

Guaranteeing bank deposits over actual 20,000 euros benchmark level for each person might fuel panic, and in actual conditions, decision like this is not justified, ING Bank’s managing director pointed out.

“I think there is no need to guarantee all bank deposits. If we look at international markets, central banks intervene when it is needed a quiescent guarantee. This measure would have fueled more panic, “ Negritoiu stressed.
Managing director of ING Bank added that lawmakers should be more focused on how solid the banking system is.
However, Negritoiu considers that National Bank of Romania has enough resources to cope with potential crippled bank institutions. He added that level of compulsory minimum reserves should be lowered, as it would create an “oxygen bubble” that will spur market liquidity.

Minister of Economy and Finances, Varujan Vosganian said on Thursday that the raise of bank deposits guarantee ceiling would be a useless measure in actual circumstances.

“Population’s deposits are not endangered, and after talks with central bank, there is no signal that threshold of deposits guarantee should be lifted,” Vosganian stated.

AOAR claimed on Thursday to Ministry of Economy and Finance and to National Bank of Romania the raise of bank deposits guarantee ceiling for population and companies above the actual 20,000 euros.

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