NBR Governor: Only panic could affect local banks

A worsening of the crisis on the international financial markets could affect the adoption of the single currency in 2014, but the local banking system will not be directly affected, Mugur Isarescu (photo), governor of the NBR (National Bank of Romania) told students at the “Babes-Bolyai” University in Cluj-Napoca. Before the euro adoption issue, Isarescu is more concerned with the lack of structural reforms on the Romanian market, especially on the labour market, and with the risk of relaxation in fiscal policies towards yearend. “It is too early to look into all the details of the financial crisis and its impact on Romania until 2014. The potential of the crisis is pretty big, and a large part of the elements that make up the current world picture could change by then. I am not a fortune-teller, but it is possible,” Isarescu said, in response to the question of euro adoption. He added that this crisis had not directly affected Romania, not because the financial system is primitive, but because Romanian banks have stayed away from “toxic” lending products, which is due to the more severe lending requirements of the NBR. “On the other hand, they did not need to seek such sophisticated products, because the Romanian market offered enough profit-making opportunities from classical products. Indirectly, however, the effect is there, given that it is panic we are talking about. Indirectly, there could be effects at any time,” Isarescu said.