Isarescu commends bankers for becoming “prudent”

Banks are going through an internal readjustment process, with the emphasis changing to prudence after the fight over market share had been the main pursuit, says NBR Governor Mugur Isarescu, whilst non-governmental lending, which should be a driver for the economy, continues to contract.

“Now competition and the fight for market share should take place with prudence in mind,” governor Isarescu said yesterday, at the end of the seminar “Financial brokerage – Where is it heading?,” organised by the NBR (National Bank of Romania).

The governor shows empathy towards bankers, after in the autumn of 2008 he said the sudden freeze of lending (non-governmental lending was then rising by 35% a year in real terms) was virtually impossible, because banks have big networks and many employees, who need to work. In 2009 the governor was still criticising bankers because they kept interest rates too high, which affected both funding demand, and clients’ ability to pay instalments on contracted loans. Over the last few months, however, the governor’s tone has become much more tolerant when it comes to bankers, although in April 2010, non-government loans fell by 4.2% against April 2009 in real terms.