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BRD president Gelin: Foreign financing, more costly

The cost of resources can cause problems for banks, margins are under heavier pressure amid strong competition and the impact will be seen in the price of loans, says Patrick Gelin, chairman of BRD-SocGen, the second biggest bank on the market in terms of assets.

'It's certain that liquidity in lei is somewhat more difficult to secure than several months ago, but we saw a similar phenomenon in the same period of 2006. The problem is that foreign financing has become more difficult, but I don't believe large banks will be harmed by this context, maybe just small ones,' comments Gelin on the current conditions of the financial market. He states the foreign market is now 'closed' to possible bond issues, including leu-denominated ones. 'External financing solutions are very costly these days', he says. In his opinion, 'Romania has been affected so far only in terms of foreign financing, which is more difficult to secure. As a matter of fact, I believe markets' reaction to potential risks related to Romania is a little irrational, exaggerated'. Still, Gelin believes things could become more complicated for Romania, too, if foreign investors start taking downcast analyses for granted and become more cautious. 'For the moment it is not the case, as I have not seen any investors changing their minds over a project,' Gelin explained. On the other hand, he says that the hypothesis of a strong contraction of the Western European economies should be taken into account, case in which Romania's economy might be affected. He does not believe one can speak of a visible slowdown of economic growth in Romania this year. Against the background of raising interests in order to get more lei, the Central Bank (BNR) is preparing to change the norm regarding the bank liquidity. 'Bankers should keep their eyes wide open on the resource part as cheap resources from outside have diminished. That sometimes aggressive generosity to push money into Romania does not longer exist and the banks with foreign shareholders have already felt it,' BNR Governor Mugur Isarescu said. Sursa: http://www.rompress.ro

Tags: foreign gelin financing brd bnr

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