SIMILAR ARTICLES

Eurostat: Romania and evolution of employee number in public sector in an European context

Romania, Hungary and Slovenia are the member states that recorded the largest increase in the share of public sector employees in the total number of… Mai mult

Ministry of Finance is drafting a new fiscal framework valid as of January 1, 2019

The Ministry of Public Finance makes a “comparative analysis” of the Tax Code and the Tax Procedure Code with a view to applying a new… Mai mult

Fitch confirms Romania’s rating at BBB- but warns: fiscal loosening is risky for macroeconomic stability

Fitch Ratings confirmed on Friday Romania’s rating for long-term foreign and local currency debt at BBB-, with a stable outlook, but warned that fiscal loosening… Mai mult

AOAR – Economy against new Criminal Code: businessmen denounce excessive protection provided to officials who cause damages to economy

The Businessmen’s Association of Romania (AOAR) asks the ruling coalition to explain the mechanism by which, after changes introduced on Wednesday in the Criminal Code,… Mai mult

“We are working on a tax amnesty mechanism”: announcement made by Minister of Finance

Finance Minister Eugen Teodorovici said at a press conference held in Bistrita that “a mechanism of this type is in progress”, a mechanism on tax… Mai mult

Three options by which BNR intends to moderate lending

de Razvan Diaconu , 21.1.2018

The BNR will impose restrictions on credits to the population, to anticipate potential non-payment risks. This could happen in March if the project is approved by the National Committee for Macro-Prudential Supervision.

We could see increases in interest rates and down payment or a limitation of the indebtedness. This is, in fact, a form of curbing inflation, reducing consumption and eliminating risks.

The rules discussed for over half a year with which BNR wants to temper lending have at least three options, according to Economica.net.

The first one is the increase in interest rates, which would make loans more expensive. But it is a lever with high risks. On the one hand, it will also affect those who already have credits and who might find themselves unable to pay their instalments. But the central bank cannot raise the interest rate too high because it brings other dangers to the country. Their level should be coordinated with the levels in other countries in the region. If Romania offers too attractive interest, it will attract large capital from abroad, will appreciate the Romanian leu to unsustainable levels, and Romanian companies will be heavily affected.

Poland chose, even during this period, to tighten capital requirements for banks instead of increasing the interest rates. Basically, it demands from banks to come up with more money from home if they want to grant more loans.

Another option would be to limit the indebtedness to a certain proportion of the applicant’s net income, namely somewhere at 55% or even below. It is a percentage applied to a net income calculated by the bank, of which the daily consumption, utilities, or insurance costs are extracted.

One last option would be to increase the down payment, which will have the greatest impact on the mortgage loans.

Now the down payment for a classic loan is about 15%. The plan would be to go up to 20-25%. Bankers believe that such a measure would be rather harsh and would only have an effect on the mortgage loans and leave out the loans for personal needs, which have much more accelerated dynamics and involve higher risks. In addition, there would be distortions occurring in the real estate market as there is the First Home Program, where the down payment is only 5%.

In the end, a mix of measures might emerge.

According to a report of the National Bank of Romania (BNR), the total amount of the outstanding loans in lei to the population and companies recorded in November 2017 amounted to RON 5.46 billion, down 0.84% compared to the amount reported in October 2017. Arrears on the loans in foreign currencies were down by 9.47%, to RON 6.25 billion (equivalent).

The total amount of loans in RON reached RON 145.89 billion (1.35% more than in the previous month), of which RON 62.32 billion were amounts contracted by economic agents and RON 79.5 billion were loans contracted by the population.

Also, loans in foreign currency totalled 92.484 billion in November 2017, equivalent in RON (0.09% more than in October 2017), of which RON 47.10 billion were loans contracted by economic agents and RON 42.25 billion loans contracted by the population.

At the end of November, the population of Bucharest had outstanding loans in Romanian lei amounting to RON 1.7 billion and loans in a foreign currency of RON 2.8 billion (equivalent). The total amount of loans in RON contracted in the capital city amounted to RON 51.63 billion and loans in a foreign currency to RON 44.63 billion.

Mergeți în homepage ›

Etichete: , , , ,
Publicat la data de 21.1.2018

Lăsați un comentariu


NEWS

Ministry of Finance is drafting a new fiscal framework valid as of January 1, 2019

The Ministry of Public Finance makes a "comparative analysis" of the Tax Code and the Tax Procedure Code with a view to applying a new… Mai mult

Eurostat: Romania and evolution of employee number in public sector in an European context

Romania, Hungary and Slovenia are the member states that recorded the largest increase in the share of public sector employees in the total number of… Mai mult

Fitch confirms Romania's rating at BBB- but warns: fiscal loosening is risky for macroeconomic stability

Fitch Ratings confirmed on Friday Romania's rating for long-term foreign and local currency debt at BBB-, with a stable outlook, but warned that fiscal loosening… Mai mult

"We are working on a tax amnesty mechanism": announcement made by Minister of Finance

Finance Minister Eugen Teodorovici said at a press conference held in Bistrita that "a mechanism of this type is in progress”, a mechanism on tax… Mai mult

AOAR - Economy against new Criminal Code: businessmen denounce excessive protection provided to officials who cause damages to economy

The Businessmen’s Association of Romania (AOAR) asks the ruling coalition to explain the mechanism by which, after changes introduced on Wednesday in the Criminal Code,… Mai mult

Number of insolvencies increased by 12% in first five months. Suspended activities - plus 31%, dissolutions - plus 59%

The increase in the number of companies and PFAs in insolvency was 11.97% in the first five months of this year, compared to the same… Mai mult

Transport infrastructure in Romania needs EUR 70 billion - double as compared to existing resources

The investment needs in Romania's transport infrastructure exceed EUR 70 billion, while the available resources by 2030 are EUR 36 billion, according to the Transport… Mai mult

Refusal to work annuls entitlement to social assistance - bill voted in Chamber of Deputies

Deputies adopted a draft law on Wednesday whereby entitlement to social assistance ceases when a job is refused. The decision, Agerpres announced, was taken with… Mai mult

Subsidy of RON 900/month for employing a graduate based on contracts of indefinite duration

The National Agency for Employment (ANOFM) grants subsidies of RON 900/month to employers who employ graduates of educational institutions, with contracts of indefinite duration, within… Mai mult

C.P. Tariceanu, before the heads of Senates from EU: The European Commission has encouraged the parallel state, in Romania it is like in the 50's

Calin Popescu Tariceanu (foto) delivered a very tough speech on Friday, in the Senate, addressed to the European Commission, which he accused of encouraging the… Mai mult

National Bank of Romania wants to lower indebtedness limit in granting loans to individuals

The National Bank of Romania (BNR) sent to banks for consultation a draft amending Regulation 17/2012, which provides for a consistent lowering of the indebtedness… Mai mult

High impact provisions: Senate has adopted PSD-ALDE amendments to the Code of Criminal Procedure

Senators adopted on Wednesday the draft for amending the Code of Criminal Procedure, by 74 votes for to 28, against. The bill goes to the… Mai mult

RBL: Workforce crisis is worse than economic crisis - 3.4 million Romanians have left the country in last 10 years

Migration is one of the most serious problems facing Romania at this time, along with the lack of infrastructure. However, the return of Romanians to… Mai mult