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Isarescu: Central bank encourages healthy credit, as Romania has very low financial intermediation rate

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Romania’s central bank long-standing head Mugur Isarescu said on Tuesday that NBR wants to encourage healthy credit in Romania, a country with a very low level of financial intermediation, business-review.eu reports.

“I am confident that (…) there will be useful ideas for formulating measures that will help reverse the trend of financial disintermediation by encouraging a healthy credit,” Isarescu said at Summer Banking Academy.

The financial intermediation rate, measured through private credit to GDP, decreased from 40 percent of GDP in 2011 to 27 percent at the end of 2017, the lowest level among the 28 EU member states, according to official data.

The central bank’s governor indicated several reasons for this decline: low capital level of the companies, large number of companies reporting losses, and regulation risks.

Recent official data showed that bank loans granted to individual and corporate clients in Romania rose 6.4 percent year-on-year in May, to RON 239.1 billion (EUR 51.4 billion), and the amount of deposits increased by 10.6 percent, to RON 308.7 billion (EUR 66.4 billion).

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