​I think the best description would be “high uncertainty”. This was announced on Wednesday by the Deputy Director of the Financial Stability Office of the BNR, Florian Neagu. We have a war on the border, we have an energy crisis, we also have a significant level of inflation around the world, which is damaging the prospects for economic growth, Nyagu also explained at the Romanian Banking Forum organized by Finmedia.

Against the background of very high uncertainty, both in Romania and internationally, the reserves we have created for the banking sector are sufficient to be able to withstand any adverse events, Nyagu also says.

The biggest problem: the current account deficit, where all vulnerabilities end

For several years, we have been paying attention to the fact that we are individualizing compared to other countries, Romania has a particular vulnerability, namely significant macroeconomic imbalances. We consider this macroeconomic vulnerability generated by the twin deficits to be important. And the question arises: who finances your deficits? It is true that the need for financing in relation to GDP is decreasing, but in absolute terms the values ​​are still significant. And the question of who could finance has many nuances, as banks already have an important influence on the banking sector, explains Florian Nyagu

When we look at European statistics, Romania’s banking sector ranks first in the volume of government bonds, and this often raises questions at the level of our European partners.

The second vulnerability, which is perhaps even more important, is related to the current account deficit, because this is where all vulnerabilities in the economy end. And I have two messages regarding this vulnerability, says the deputy from Stability. First, this year the competition deficit may be greater than the budget deficit, which means that the non-state sector is also in deficit. This is a situation that deserves all the attention!” says Neagu

Equally important is that the share of non-interest-bearing flows that could finance the current account is significantly reduced.” If 5 years ago these non-interest-bearing flows accounted for approximately 100% of the deficit (that is, we had deficit financing), currently their level is more than modest.” , – says the BNR government official. “The figures for the first 8 months show a share of about 30%. Of course, it is possible that it will increase, but I do not expect that there will be drastic changes,” he also states.

As for the banking sector, it has an appropriate financial situation to withstand possible downside risks. We believe that the banking sector is poised to continue supporting the economy with the necessary resources – both capital and liquidity – to continue funding.

• If we look at how businesses are financed, we will see that the requirements for bank loans are quite modest. In the first place, of course, are commercial debts. Although they are much more expensive! Florin Denescu (Romanian Association of Banks – n.red) did the math at some point and it turned out that the interest when you finance yourself through a commercial loan is tens of percent. In banks – 10%. In addition, the non-repayment rate of commercial loans is 3 times higher than that of bank loans.

Recent interest rate hikes have had a significant impact on and contributed to the increase in debt service. But those with standard mortgages have better solvency. So I want to say that despite the good times with low interest rates, limiting the degree of indebtedness in the long run helps borrowers manage their debts better, concludes Florian Nyagu

Watch here the presentation made on Wednesday by Florian Nyagu at the Romanian Banking Forum