Saving or borrowing: the big dilemma

Bankers consider that savings and consumption should grow in parallel because there”s plenty of room for both, considering the low levels they are at now.

On the other hand, maintaining RON interest rates at low levels may additionally raise the appetite for consumption and borrowing, which would have a negative effect on inflationary developments.

“It is obvious that should the real interest rate stay at negative levels for a long period of time, despite the fact that the population largely has no investment options other than banking deposits, consumption may rise and inflation may see some slippage. The Romanian economy is surprisingly fragile,” stated Mihai Bogza, Bancpost chairman, during the workshop entitled “The dilemma of the consumption society: borrowing or saving,” organised by Ziarul Financiar together with ING Bank. However, Bogza says that both deposits and loans for the population are at such a low level that they cannot threaten the stability of the banking system.

Eugen Dijmarescu, vice-governor of the National Bank, also says that both consumers and companies are in the comfortable position of being net creditor in relation to the banking system, so that there are no risks from this point of view.

According to the NBR, the main problem is the imbalance between the maturity of banking assets (as loans are particularly contracted on the long term) and liabilities (most deposits are opened for very short terms).

In the opinion of Misu Negritoiu, deputy general manager with ING Bank, those who want to save have a difficult choice to make, because at current levels, interest rates do not secure real positive yields. liviu.chiru@zf.ro