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Litigation costs affect clients and banks alike, and for lower costs of loans, we have to take them into consideration, Governor of the National Bank of Romania (BNR) Mugur Isarescu told a conference called "Alternative resolution of financial and banking litigations".
"Law and the institution combined in Romania make it that before the courts step in or even to avoid their trail, if banks and clients are in litigation, they are equally entitled to correct, true information and guidance. This is a big step forward, because many of the litigations arise due to lack of information, due to lack of knowledge and misunderstandings, which reduces litigation costs enormously. Litigation costs are a burden on both sides and, if we want to have lower credit costs, lower interest rates, lower commission fees, we have to think about these costs," said Isarescu.
He said that the idea of setting up a litigation resolution mechanism was presented to him by a banker in the 1990s. "Towards '91 -'92, a Romanian banker, now retired, told me: Make a centre of ... we did not call it a conciliation, but a reconciliation centre. You will see how many conflicts will occur between banks and creditors. If everyone goes to court, they will bury the courts in unending trials, especially since credit always has an emotional side. It is a great joy when you get it, and a great difficulty when you start repaying it. And if you repay it half of your life, then it's not a pleasure at all," he said.
He pointed out that there are European directives on consumers protection and the establishment of dispute settlement mechanisms. He mentioned that Directive 17/2014 is designed to help those who cannot repay their loans, not those who do not want to repay. In closing, he said he goes home at BNR to take care of the Romanian Interbank Offer Rate (ROBOR).
