When Lehman’s failure sent shockwaves around the world and jolted the financial systems, including the Romanian, bankers put a stop to small-business lending which snowballed into a state of fear and panic that sent many companies out of business and people out of work.

At Coface Romania, in October, the potential damages to commercial risk insurances skyrocketed to a total 16 million lei from only 2 million.

“Lehman Brother’s collapse blocked the financial system and halted lending in Romania. All banks put a stop to credit lines and notifications for potential claims to pay increased rapidly”, said Cristian Ionescu (photo), chief executive of Coface Romania.

According to Coface, the economic crisis is most likely to last around two years.

“The global crisis erupted at the end of 2007 and it will probably be over by the end of 2009. In 2010 economies will stabilize and start growing again. Romania fell into financial crisis when Lehman Brothers went bankrupt, last year in September, and will emerge from crisis this time next year”, said the head of Coface Romania.

Since it began operations in Romania, Coface covered total claims of 16 million lei, 11 mln of which were paid, and 5 mln lei were technical reserves. The average claim recorded by Coface Romania was approximately 150,000 lei.

“Since we started operating in Romania, we recorded 11 claims for credit insurance in which there was nothing we could do, 100 of them were insolvencies and 10 are underway’, said Cristian Ionescu.