“We are worried about the banks that are offering 5% on euro deposits, because we don’t want this product to eat into their capital,” central bank’s governor Mugur Isarescu told a round table discussion. “What sort of investments can you do so you can afford to pay 5%?” he added.
Isarescu said the banks are right to focus on stimulating domestic savings, but this process takes time and offering such high yields can only increase costs. Besides, forcing the saving process can take its toll on the domestic consumption, he added.