Whether we are talking about Greek-held banks affected by the difficult situation in Greece, or about Romanian-controlled banks, there are many offers of 4% interest rates a year on euro deposits, which is a surprise for the NBR governor.
Very few banks – if any – can secure the necessary amount of
resources in euros from the Romanian market, which has generated
competition over interest rates on euro-denominated deposits, says
Dominic Bruynseels, CEO of BCR.
“Interest rates are high on euro deposits because financing needs
cannot be covered locally, banks need to also borrow from parent
banks, bearing the cost of the country risk. “In 2009 the BCR took
out a subordinated loan worth 120 million euros with an interest
rate consisting of six-month EURIBOR plus 4.2%, which matures in
2016.
NBR governor Mugur Isărescu declared himself “very surprised” at
the “excessive” interest rates that local banks offer on
foreign-currency deposits, saying there are banks that pay 4-5% a
year, while in the eurozone “you barely get 1% on any foreign
currency deposit.”