“As preserving credit discipline and avoiding moral hazard among debtors contributes significantly towards enhancing financial stability, we will refrain from adopting legislative initiatives, such as proposals for the personal insolvency law and for the debt collecting law, which would undermine credit discipline,” the document obtained by Mediafax noted.
This commitment has been renewed on various occasions during the last years.
Romania is one of the few countries in Europe that doesn’t have a personal bankruptcy legislation, leaving over-indebted consumers unprotected against creditors, a report commissioned by the European Commission showed in April.
Romania, just like Hungary and Spain, offers bank customers no viable solutions to have their debts restructured via legally monitored bankruptcy proceedings, a London Economics’ study on banking consumer protection stated.
The survey was commissioned in 2011 and completed last year. After its completion, the Spanish authorities have implemented a series of measures to protect bank debtors from being evicted from their homes if they are not able to pay their mortgage rates in time.
Moreover, the International Monetary Fund has been pushing for a personal bankruptcy law in Hungary.
In Romania, however, the lawmakers have twice rejected personal bankruptcy regulations, citing reasons such as lenders’ concern about the banking system not being able to withstand possible losses or that the high level of criminality could lead to more attempts to defraud banks than in other countries.
The government was also not supportive of a personal bankruptcy law, with the main reason being the opposition of the IMF, the study showed.