NBR does not want to hinder lending

Last year’s consumer credit boom pushed the weight of the non-governmental lending in Romania’s GDP to 16.2%, from 11.2% at the end of 2002. Even so, the banking intermediation level remains extremely low compared with the other EU applicants. In spite of the spectacular credit growth, the weight of the money supply in the GDP fell from 24.7% to 24.4% last year. “This shows that the fast lending growth mostly relied on foreign resources, which can cause trouble in the future,” says Eugen Radulescu, advisor of the NBR Governor. Looking back upon 2003 he also points out the very wide gap between the population’s savings dynamic and the dynamic of the lending, resulting in “de-saving.” In the first month of 2004, right before NBR’s lending guidelines enforced, the volume of credits granted to individuals maintained its upward trend, progressing by 4.4%, as the lending in ROL went up 5.2% and the lending in foreign currency rose 2.8% if calculated in euros. Savings rose only 1.6% in nominal terms in January. “NBR did not set out to hinder lending. Had it wanted to, it would have surely done so by steps like upping the minimal compulsory reserve or by setting nominal caps on lending growth for every bank and penalties for anything above the cap. The so-called “breaches” were possible “to find” precisely because NBR only wanted to temper this lending exuberance,” Radulescu added. ZF