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BNR Governor Isarescu: 'BNR's powers on the real estate market are very much limited'

The powers of the National Bank of Romania (BNR) are very much limited, because the market has its own independence, BNR Governor Mugur Isarescu told a televised show hosted by a commercial television.

'What we can do at the most is to statistically monitor what happens on the market knowing that any brutal development there may negatively affect inflation and financial stability. These are our powers. Much of the statistical information comes from the BNR stability report. The bank makes calculations and estimates. I cannot say we are not in the know. We are knowledgeable of the risks, but BNR limits itself to its main preoccupation, which is with price stability, not the stability of the real estate market,' Isarescu explained. He added that the international financial turmoil triggered by the subprime crisis in the US ha very serious consequences in some European countries and Romania will categorically be affected. 'Nonetheless, we are sticking to our known statement that the impacts on Romania are indirect. It could have a major impact. As capital flows may generate serious effects on the exchange rate, for example, particularly in the short run, and also on banks, if they have raised short-term loans, but we know that short-term funding is very limited. As far as the possible direct impacts on Romania of these financial turmoil is concerned, the BNR's opinion is that these are very much contained because Romanian banks have not reached a sophistication level where to use derivatives and other sophisticated financial products that may spell trouble,' said Isarescu. Sursa: http://www.rompress.ro

Tags: market powers isarescu bnr

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