Business people and bankers oppose IMF

The balance of credits granted by the Romanian banks to individuals and companies throughout June 2002 – June 2003 went up 51.4%, NBR data show. The growth in real terms reached 33%, as the actual growth in the first half was of 17.4%. The Association of Romanian Businesspeople (AOAR) feels the first-half increase in non-governmental lending is not alarming and there should be no need for steps to restrict financing for the real sector. “This is just a fear induced by the poor risk infrastructure in the Romanian retail banking system and the past of the Romanian banking system, which created AVAB (Banking Assets Resolution Authority). There is also the fear of an overheated economy and of precedents, which show what a pre-electoral year means, but things are much different now,” Florin Pogonaru, AOAR chairman said. The AOAR representatives say the National Bank and the Government should not give in to the pressure of the International Monetary Fund, which demands steps to contain non-governmental lending growth. The representatives of the main lending banks met with IMF’s Negotiator for Romania Neven Mates, to convince him the lending growth was not as unhealthy as it might seem, but was necessary instead. They argued that most of the banks on the market were foreign capital banks so that they operated under strict prudentiality norms. They added the short-term financing sources had increased, an increase that also included the lines of credit from the international financial institutions such as EBRD, which made it possible to finance bigger businesses for longer terms. ZF