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Rasvan Radu( Unicredit) : Banks demand higher interest from the state due to the political risk

The political risk makes banks to demand higher interest for state bonds as the risk means a cost, the executive chairman of Unicredit Tiriac Bank, Rasvan Radu said.

The political risk « makes us require more, a higher interest for state bonds. We think that at this moment we have to pay a cost according to the risk" Radu said.

But he denied that, on the market there would be tensions although lately the finances annulled some emissions of bonds on short therm due to the fact they did not accept the interest required by the banks.

" It is a negotiation on the market, it is a negotiation we have to have with all types of clients not only with the state and sometimes we reach an agreement and then we sign the transaction, some other times we don't reach an agreement and nothing happens. I think this is normal" the executive chairman of Unicredit Tiriac said.

He also mentioned the fact that the banks have limits as regards investments in state bonds " limits that have come to be reached" so that the banks' appetite for state bonds will drop.

« That is why we need important projects of the state sector,to credit them in a direct way" Radu said.

In a report published on Monday morning by ING Bank Romania it was shown that " interest rates on short term could go up easily due to the uncertainties on the Romanian politics".

The ING MFP analysts appreciate that state bonds sale in the present context on the market would need that the ministry of finances " accept the payment of a profit of 10%".

« We think that BNR will organise a repo operation as the Ministry of finances could be in the situation of rejecting the bet , although the budgetary execution is alright" the ING report said.

The latest state bonds place on the market by the finanaces had a profit of 9.9% and 10% annually.

The general consolidated budget deficit reached at the end of September 5% of GDP according to preliminary data, as the IMF fixed the government a target for the end of year of 7.3% of GDP.

Sursa: http://www.actmedia.eu

Tags: state unicredit bonds political interest banks higher bet bnr ing mfp

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