Romanian banks less vulnerable to the international crisis

The local banking system is less vulnerable to international financial turmoil, because it has solid capitalization and is only exposed to the domestic market, according to Romania's National Bank (BNR) Governor Mugur Isarescu yesterday.

However, Isarescu told bankers to be cautious and consider tempered economic growth in future.

"I ask my fellow bankers to stop confusing clients, to stop filling their mailboxes with all sorts of promotions; they must bear in mind that market economy registers growth as well as decline," Isarescu added.

Although "it has come forth safe from the current crisis," the local banking system must cope with a responsible evaluation of banking operation risks and proper labor force training, according to Isarescu.

He estimated 8-9 percent economic growth this year, given that gross domestic product (GDP) increased 8.8 percent in the first half of 2008. Furthermore, the inflation rate is declining and could reach 6 percent by the end of the year. In August, inflation was 8.1 percent, double the EU average, according to the European Union's Eurostat statistics office.

Business Standard