Loan arrears expected to increase further
Romanian economists say IMF assessment was adequate, not too strict but not too tolerant, and the following reviews will be similar. Moreover, economists say Romanian banking system is solid, but don’t omit the fact that delinquencies among borrowers is expected to increase further.
“NPL ratio is expected climb, but I think Romanian banking system is well positioned so as to cushion even more severe financial shocks”, Ionut Dumitru (photo), senior economist of Raiffeisen Bank Romania told Wall-Street.
IMF officials have monitored the local banking system and called for Romanian banks to be subject to stress tests based on different scenarios to identify banks’ vulnerabilities and review their capital adequacy ratios.
The National Bank of Romania will conduct a new round of stress tests in fall for the local banks.
“In fall, the situation of bad debtors will get worse, the number of bankruptcies will increase, and many distressed companies have banking loans to repay”, Laurian Lungu, managing partner of Macroanalitica told Wall-Street.
However, the future reviews conducted by IMF depend largely upon how Romanian authorities will put in place wage and pension reforms until the presidential elections.
The Government committed to pass the single wage grid law in the public sector by the end of October and admitted over the normative act under which the public sector payroll would be reduced from current 9% of GDP to 7% of GDP until 2015.
“NPL ratio is expected climb, but I think Romanian banking system is well positioned so as to cushion even more severe financial shocks”, Ionut Dumitru (photo), senior economist of Raiffeisen Bank Romania told Wall-Street.
IMF officials have monitored the local banking system and called for Romanian banks to be subject to stress tests based on different scenarios to identify banks’ vulnerabilities and review their capital adequacy ratios.
The National Bank of Romania will conduct a new round of stress tests in fall for the local banks.
“In fall, the situation of bad debtors will get worse, the number of bankruptcies will increase, and many distressed companies have banking loans to repay”, Laurian Lungu, managing partner of Macroanalitica told Wall-Street.
However, the future reviews conducted by IMF depend largely upon how Romanian authorities will put in place wage and pension reforms until the presidential elections.
The Government committed to pass the single wage grid law in the public sector by the end of October and admitted over the normative act under which the public sector payroll would be reduced from current 9% of GDP to 7% of GDP until 2015.