Isarescu (BNR): Central bank’s policies must be cautious

The central bank’s policies must be cautious, due to the experience and to the market conditions, Governor of the National Bank of Romania (BNR) Mugur Isarescu told a seminar on financial intermediation on Thursday.

„The flag is passed from the competition, from the market share fight, but under production conditions. The policies of the central bank must be cautious too, due to the experience and to the market conditions. The dynamics is not sustainable and deep-going processes occur within banks with more emphasis on the part related to caution,” said Isarescu.

At the same time, the BNR Governor underlined that the National Bank may be anti-cyclic through the measures it takes, given that commercial banks are pro-cyclic.
„Excessive indebtedness is discouraged. Banks are pro-cyclic, we cannot say they are anti-cyclic. We can be. There is nothing written about us needing to have profit. Nor that we must have losses, it is true,” said Mugur Isarescu.

Likewise, the BNR official added that Romania „would have entered in the blasphemy book” if it had restricted the exchange market in 2008. „We are completely bound to what happens in the world. We are now more open than Germany. If we had restricted the exchange market in 2008, we would have entered the book of blasphemy, in addition to our having joined the EU unprepared,” said Isarescu.

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