Andreas Treichl, the chief executive of Erste Bank and chairman of BCR's Supervisory Board, has called for an agreement with the central bank and all other commercial banks that would cause a revolution on the lending market.
The purpose of this: to contain the foreign currency lending as much as possible, starting with consumer loans, which should only be granted in RON.
"Over the past six or eight weeks we have managed to gain the attention of the European Central Bank and of central banks in Romania and Hungary, we have had discussions with Governor Mugur Isarescu and Andras Simor. I believe it is quite likely that we will see some action taken to contain the foreign currency lending as much as possible in the next six months," Treichl said.
Therefore, both countries would get rid of one of the main vulnerabilities that affect the risk perception of the foreign analysts.
"The biggest problems with foreign currency lending are in Romania and Hungary. Both countries need to have a major interest in containing this phenomenon which affects the capability of the central banks and governments to control foreign deficit and inflation," Erste's head says.
He believes retail financing in foreign currency cannot be really contained unless concerted action is taken together with national central banks and ECB.
"Local central banks say they hate foreign currency lending, but they cannot stop it without ECB's help, which will have no discrimination among currencies. Even ECB itself admits it's a big problem, and the approach is a 'let's try to solve this' one."
Moreover Treichl says the other banks in Romania may consent to stop granting consumer loans in foreign currency.
"Consumer finance in foreign currency is really stupid. Unfortunately, there are some banks that are really pushing lending in foreign currency." This is not
