“Housing banks bring more stability to the system, unlike commercial lenders, which also run speculative operations,” Isarescu told a banking forum.
Additionally, housing banks create scope for long-term savings, which are pre-requisite for healthy investments.
“Romania runs a deficit deriving from imbalances between savings and investments. The savings made are insufficient to cover the investments, so we go to international markets,” Isarescu said.
Housing banks and the pension funds provide long-term savings, he added. Moreover, these banks act as a default stabilizer in times of crisis, Isarescu said.
Nevertheless, the savings and credit system is little known in Romania and the banks should promote their services better, the central bank’s official added.
In 2009, Romania launched a first-time home buyer credit to help medium-income citizens purchase houses. The program is available only to first-time buyers, who benefit from substantially reduced down payments and annual interests.
Also, the authorities offer bank customers a 25% bonus on their savings deposited in one of the two housing banks Raiffeisen Banca pentru Locuinte or BCR Banca pentru Locuinte.