Isărescu: The economy is sure to rebound starting this winter

Ordinance 50 on loans is not retroactive, but banks should not be "punched in the plexus" by applying the new rules to existing loans, as well, even if "there were excesses when granting some of the loans," says NBR governor Mugur Isărescu. "I think we don't really want to have a banking crisis in Romania just for the sake of seeing how many of these extra costs banks can bear," said the head of the NBR at the "20 Years Later" show broadcast on Pro TV yesterday. On the other hand, he agrees banks boosted interest rates and have not helped the economy. Even so, he says there is a "calculated probability" that, starting in the winter of 2010-2011, a sustainable, "relatively sound" economic growth could emerge. Isărescu specified, however, that it takes at least one year from the time recovery starts until it is felt in terms of living standards.
On another note, Isărescu added the Romanian banking system was not working as a cartel, but also not functioning very smoothly, and was is under pressure from the uncertainty of the local market and from the "unending" talks on the political and social scene.
"I don't think the Romanian banking system functions as a cartel. Admittedly, it is not working very smoothly, and is itself pressured by the uncertainties in this country and by the unending talks on the political and social scene. All these uncertainties translate into extra costs," Isărescu said on the "20 Years Later" show broadcast yesterday on Pro TV.
Asked what the NBR was doing, how it pressured banks to cut interests, Isărescu said: "Can't you see what we are doing?! We are doing certain things for which we are criticised or misunderstood, to put it delicately. For instance, we are leaving more cash onto the market."
He admitted the measures taken by the NBR to cut interest rates were not working, but does not believe this is because the system works as a cartel or as a monopoly.