RSS
Voinea (BNR): indebtedness of non-financial companies and households stands at 42 pct of GDP
The total indebtedness of non-financial companies and households stands at 42 pct of GDP, with the former accounting for 26 pct of GDP, deputy governor of the National Bank of Romania (BNR) Liviu Voinea on Wednesday told a conference organized by Coface.
"From a statistical point of view, financial intermediation is reduced as far as the lender is concerned. Yet from the debtor's standpoint we, at BNR, also want to have a comprehensive approach of financial stability aspects, and find that the total indebtedness is significantly higher than the total indebtedness in the banking sector. The indebtedness of non-financial companies and households accounts for 42 pct of GDP, and the total indebtedness of non-financial companies is 26 pct of GDP. The difference between total bank lending and total indebtedness results from non-resident banks and parent companies, as well as from non-bank financial institutions. On the households segment - mainly from non-bank financial institutions. The total indebtedness also includes assigned debts because, although they are struck off the banks' balance sheets, they still remain as debts due to lenders and affect their capability to further access other loans," Voinea said.
According to him, financial intermediation expressed as the bank lending share of GDP fell to 29 pct at the end of 2016 from 38 pct in 2008, among the lowest in Europe.
"Financial intermediation calculated as the GDP share of bank lending reached 29 pct at the end of 2016 compared to 38 pct in 2008. Both figures are among the lowest in Europe. There's been a natural disintermediation process immediately after the crisis. It was a controlled disintermediation process, first under the Vienna Initiative, and offset by the increase in capital contributions whenever the watchdog, that is, the National Bank, requested commercial banks to do so. The massive reduction of bad loans through a complex program of measures implemented as of 2014 contributed to the cleaning of the banks' balance sheet, but also to the full provisioning and striking off balance of certain loans," the BNR official added.