Banks demand higher yields from state

Commercial banks through their analysts are constantly asking for higher yields of the T-bills already bought several months ago, while the Treasury is trying to cap yields at 7% a year so that the image of Romania remains that of a high-risk country, despite the agreement with the IMF and the painful efforts made to balance the budget.
In the debate about the “right” level of yield on T-bills, the analysts of the private banks – which actually lend money to the state and therefore are directly interested in getting as high an interest as possible, are much more vocal, and often cited by foreign news agencies such as Bloomberg and Reuters. Lately these agencies have been reporting on the yields on the Romanian T-bills increasingly more often, with the international investors interested in the topic, considering they own a significant part of the certificates and bonds issued by the Finance Ministry.
How do independent analysts see this debate?
“On short term there is no justification for such a high interest. What the Finance Ministry did (by capping the yield paid at 7% i.e.) is right,” says Daniel Dăianu, professor of economics and former member of the European Parliament.
Yields on T-bills had plunged in the spring from over 10% at the end of last year towards 6% especially because of the high interest of foreign investors in the Romanian debt. The trend reversed in April, with banks asking for higher and higher yields, once the risk perception worsened, given the talk about the prospects of a new worldwide recession.