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Mugur Isărescu, the governor of the National Bank of Romania, pointed out that in the case of mortgages, with the increase of interest during repayment of the loan, the client's debt level increases. Starting at a certain level, increasing debt entails an increased probability of default. Isarescu also said that we will not significantly increase the degree of financial intermediation if banks retain the same business model as before: the exclusive lending of individuals
In his speech, the governor of the central bank has shown that we are already facing debt distress, at least in the case of mortgage credit. He noted that, despite the fact that it is normal for the ROBOR to grow as inflation and monetary policy interests increase, a two-point increase in the base interest rate of A mortgage leads to an increase in debt. customer with 6%. "The 2 percentage point rise in the interest rate generates an increase of about 6 percentage points in the mortgage debt rate, and a 10-point increase in debt. is associated with an increase in probability Mugur Isărescu said
that there are already significant signs of over-indebtedness in the case of a large segment of the population – people with lower income than the wage Thus, at the end of 2017, the debt of this category (measured by the ratio of indebtedness, called DSTI service for income) was 51% .The fact that the tendency to increase debt is mainly due to mortgages is another source of concern, although in Romania wages have experienced appreciable growth rates in recent years
. "Given the sensitivity of the indicator DSTI to rate fluctuations the rate of Interest is significantly higher in the case of mature loans, the exit of the global economy from the negative interest period should affect us. A high level of debt for low income people is difficult to maintain, given the high interest rate risk The governor of the central bank believes that the increase in banking intermediation can not depend excessively, as up to here, of the household sector. In this context, Mr. Isarescu pointed out that, to achieve a degree of financial intermediation of 40% as Romania had done seven years ago, the annual growth rate of private credit should be d & # 39; About 10% for the next 10 years, the conditions under which nominal GDP would increase on average by 6% per year.
Even though she does not reject the idea of such increases from the outset, she shows that a sustainable increase in financial intermediation can not be achieved on the basis of the fact. current. banking business template. "I consider that such an evolution is possible, but I do not think it is unlikely that a sustained increase in financial intermediation will follow the continuation of the current economic model in the banking sector. Healthy, sustainable and balanced growth of financial intermediation a diversification of sources of exposure to the economy at the expense of concentration on retail banking, in general and on the real estate sector in particular " says Mugur Isărescu
co-financing projects from European funds and possibly participation in public-private partnerships The governor's statements were made at the banking summit Ziarul Financiar, in the context of a more detailed analysis. broad of the degree of financial intermediation in Romania
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