Even the strongest of companies can find themselves in hot water when beneficiaries cease paying, whilst in times of crisis, problems that are not solved immediately can spread rapidly in several directions, with unpredictable outcomes, warns Marinel Burduja, prime vice-president at Raiffeisen Bank.
"In a crisis period, contagion is unstoppable. Crises can be compared to epidemics; they spread in all directions and affect both the rich and the poor," explains Burduja in an interview with ZF. He believes that as the crisis fallout deepens, the only companies that will survive on the domestic market are ones that are profitable, that sell competitive products, and are run in a "responsible way".
As head of Raiffeisen's corporate unit, Burduja believes it is unnecessary to talk about a freeze in lending, but rather banks must adapt to the new market conditions "(...) RON lending can remain strong, if we use it correctly".
Burduja adds that domestic banks have yet to report any serious problems, but it remains crucial for the political and economic authorities to have the right attitude towards banks. The banker also maintains the level of loan interest rates depends only to a small extent on banks.
In addition, Burduja reveals that international banking groups present in Romania are also hurt by the crisis, and will first solve their own problems and only then, if possible, will they solve the subsidiaries' issues.
"We are prepared for certain customers to have problems, because to a certain extent this is unavoidable. We are facing highly volatile prices for financing resources, amid the lower appetite of international banks to grant lending lines to Romania". In this context, the banker says there will be constant budgetary reviews in the case of both customers and banks. As regards finding solutions to the deteriorating financial and economic situation, Marinel Burduja believes these can only come from the government, something that has already occurred in most European countries, whilst he criticises the Romanian authorities' late reactions and their tendency to minimise dangers.
The banker believes the downgrade of Romania's rating, though severe, is also drawing attention to the fact that it is currently an unpredictable country.
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