Banking sector under the Competition Council's scrutiny
The high fees for early loan repayment, the conditioning by the
banks of the granting of a loan on the opening of a current account
and in some cases on the acquisition of an insurance policy as
well, but also the fees related to using cards for payments are
some of the Competition Council's issues of concern related to the
banking sector.
Nevertheless, the Council has just one investigation underway in
the banking area, opened one year ago, when several banks allegedly
tried to manipulate currency market interest rates.
"It's a field of concern for us. It is important through the number
of involved consumers, it has high profit margins and interests are
high. When you see high profit margins in a field, you take a close
look," says Bogdan Chiritoiu, 39, Competition Council
chairman.
Last year, banks generated a record net income of 1.2bn euros, even
though they started feeling the crisis in the last quarter.
As an administrative authority, the Council has powers to restore
and maintain a competitive environment, as well as supervise
players in the economy. Like most supervisory bodies, the Council
is highly discreet as regards the investigations it carries
out.
Chiritoiu is unwilling to talk about possible plans to launch
investigations. "As a rule, an investigation starts with an
unexpected inspection. We do not want to warn those we
target".
However, he is not concerned about the banking field, considering
the market is sufficiently fragmented for competition not to be
blatantly harmed. Still, the Council plans to scrutinise market
sub-segments, at a regional level.
Chiritoiu says early loan repayment fees only make sense in the
case of loans with fixed interests, where banks take on bigger
risks. However, the Competition Council cannot initiate legislative
projects, with the Consumer Protection Authority having such
powers.
Chiritoiu says he is trying to improve collaboration with the
Consumer Protection National Authority and with the NBR.