“I’ve noticed some strange reactions regarding the regulations. I expected they would be regarded as a return to normalcy, because consumer loans with a maturity of more than five to seven years are pointless,” Isarescu said at the Romania Financial Forum 2011 organized by Mediafax and the central bank.
“The banks with the most problems in the non-performing loans sector are exactly the ones that gave loans with maturities of 20 years,” he added.
Isarescu said long-term loans entail a change of the lifestyle in Romania and that consumers should be made aware of all the aspects involved.
“People should know that taking out loans for a period of 30-40 years presupposes a different lifestyle. The long-term loans we all want must be financed on a long term,” he said.
Speaking at the same forum, Alpha Bank’s president Sergiu Oprescu said the global downturn has changed consumers’ behavior, making them more aware of possible risks.
“Consumer’s behavior has changed during the crisis. Before that, economic growth was based on consumption, but it was a consumption that reached beyond the social status and people would mortgage their houses to buy cars. You no longer see that now and the consumption will be driven by basic needs, it will be more balanced,” Oprescu said.
The central bank has drafted a new set of banking measures, including, among others, a lower maturity on consumer loans. According to the regulations, Romanian banks will have to reduce the maturity of consumer loans to five years from 20 currently, while extending minimum guarantees to 133% of the loan’s value.