The most expensive credit in the European Union can be found in Romania because we have a low degree of intermediation, and the profit is made from the margins, stated, on Wednesday, Adrian Vasilescu, strategy consultant at the National Bank of Romania (BNR).
"Even if the interest rates are low, Romanian banks have more money than there is demand. The offer is higher than the demand. And still the interest is high. For what reason? The ARB director has a chart that he has shown at many conferences about intermediation in Romania. Intermediation means a ratio between the private credit granted to companies and population and the GDP. The ratio between the private credit and the GDP is called financial intermediation. There are calculations being done in this world and on our continent. The European average is at 100 and something percent. Many countries talk of intermediation between 150-200 pct. Switzerland has the ratio of intermediation at around 300 pct. And we're on last place in the European Union, 28th, with 26 pct intermediation ratio. With 26 pct intermediation we can't have, not five times the interest rate, as some say, but still the highest interest rate for credits in the European Union. So the most expensive credit in the European Union can be found in Romania," Adrian Vasilescu said.
He mentioned that in these conditions it's normal for companies to go and loan outside the country, and some companies to appeal to loans from shareholders.
Adrian Vasilescu explained that Romania has the most expensive credit because the price of the credit is made on the margin and not the volume.
"If people need, in this country, a bank credit, whether they are in the population segment, or in the company segment, they need it, they go to the bank, get the credit and they pay. The credit can't be cheaper in Romania because here the profit is in the margin, not in the volume. 26 pct, the smallest intermediation in the European Union, spells impossibility to appeal to profit in volume. We'll go forward with this for a while from now on because the perspectives are not very bright," said Adrian Vasilescu.
In his turn, the executive chairman of the Romanian Banks' Association (ARB), Florin Danescu, said that Romania does not have the highest interest rate for credits in the European Union and that it depends on the product and the currency. Adrian Vasilescu replied that he referred to credits in their entirety, not a certain type of credit.