It is unacceptable that only five years before entering the pre-euro adoption phase, the financial market should be as rudimentary as it was five years ago, that it should not have long-term instruments and yield curves, says Misu Negritoiu, chief executive of ING Romania.
"NBR gets up to the top of its ivory tower and says 'it's the market's problem, you do the fighting'. Yet the NBR and the Finance Ministry are the 'market' too, they are the biggest issuers and they have an essential contribution to the market's profile. In the end it is a matter of the state to have a market with developed instruments," Misu Negritoiu told ZF.
He says that a large part of the financial business still stays with minimal maturities, of up to one week.
Negritoiu also blames the NBR for discouraging differences of opinion in terms of market phenomena and macroeconomic indicators, suggesting analysts are trying to influence the behaviour of companies based on certain interests.
"The NBR does not realise that a real market works with a plurality of opinions. It is absolutely natural to have an opinion as an analyst, as a bank. It's better to stimulate them to reach a balance in this game of opinions, rather than choke them. The NBR should know that the transfer from the analyst's opinion to the business decision is more complicated and a client considers several opinions before making a decision."
Negritoiu expresses concern about the effects of promoting messages like "nothing bad can happen" , which can reduce vigilance to the potential risks.
"We are boasting about our strong RON and the inflation decline while the market is puddled with liquidity and everybody's rushing to get exposure to consumer and real estate loans.
"You cannot be that confident when corrections happened everywhere, when there is a cyclicalness law that works anyway. We haven't had any crisis so far but God forbid! We're promoting loans in Swiss francs without looking at the exchange rate, 90% of the real estate loans are in euros; if a brutal depreciation occurs, it will wreak havoc on the market because everything is just a bet on the exchange rate of the RON."
As for the threats of the Finance Ministry about a potential halt of the government securities issues because of the interests deemed as too high, Negritoiu says that the institution should be consistent, even though it does not always agree with the price, because this is the rule of the game.
"Consistency is more important than pressure on the price. The price is not artificial, it is created by the market climate. Would the Finance Minister have liked the same low price the day the President is suspended?"
Negritoiu says that the position taken by minister Varujan Vosganian can cause him to lose in the end, and the option mentioned of raising cash from abroad will cause more problems by putting additional pressure on the exchange rate.
"They can afford to not take money from the market now, but they will become a net debtor soon and this attitude they have now might cost them when they least expect it."
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