Strong warning from the head of the banking association. Dănescu, Romanian Banking Association: There are calls to suspend interest payments, meaning to halt the banks’ operations

Florin Dănescu, executive director of the Romanian Banking Association, warns that the multiple legislative initiatives targeting banks pose a major risk to the financial system and the economy. The most serious scenario, he says, would be the suspension of interest payments, a measure that could halt both lending and loan repayments.

The statements were made at the Profit Financial Forum, as banking representatives appeared in Parliament 11 times during the first 20 days of September to discuss projects affecting the industry.

Dănescu particularly criticized the initiative introduced after the record fine imposed on banks by the Competition Council, which accused them of allegedly reaching an agreement to maintain a high ROBOR level. The bill provides for changing the formula used to calculate interest rates and compensating affected customers. According to the ARB representative, the measures could trigger a lending freeze.

He emphasized that Romania’s banking system is sound, liquid and solvent, helping keep Romania in the investment-recommended category. At the same time, Romania has the lowest level of financial intermediation in Europe, while legislative instability could undermine the goal of increasing banking penetration.