The savings of individual consumers are very low at the moment, yet once inflation drops below 10%, the capital market, the investment funds and the private pension funds will develop and things are likely to change, Patrick Gelin, BRD-SocGen CEO feels. With the similar history in France in mind, Gelin believes there will come a time when the authorities will have to think of fiscal relaxation measures to stimulate savings. "The Romanian savings market is just at the very beginning now. In order to be able to talk about savings, inflation must go down first, and then, as soon as inflation drops somewhere in the neighbourhood of 5%-8%, the population will see saving money differently. Our clients, as well as those of other banks are highly liquidity prone. We are still having trouble persuading them to save cash," Gelin said. He mentioned the situation in France in the '80s as an example. Back then, inflation was quite high, 14%-15%, and the banks had a hard time trying to promote medium and long-term savings products. "There were two things that started this process in the end: the inflation decline and a series of fiscal incentives for those who would prefer medium and long-term investments and savings to cash," BRD-SocGen CEO said. "I believe that when inflation becomes even lower, the authorities will have to think of fiscal incentives for individuals investing in the medium and long-term," the BRD official said. ZF
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