The market is rather unbalanced financially, other segments than banks must be developed, BNR Governor says

The financial market in Romania is unbalanced, as banks have a massive dominance, with 80% of total financial assets, BNR Governor Mugur Isarescu said on Thursday, adding that he considers that the situation is not an advantage for banks, other segments should be developed.

“It isn’t over-dominance, but I would say that is a massive dominance of banks in the financial system in Romania. Some 80%, even more of the total financial assets in Romania belong to the banks. This is not necessarily an advantage. There is no advantage for us either, the representatives of the banking system. We have an unbalanced financial market. It’s important for banks to have alternatives, to have a more developed non-banking financial segments,” Isarescu said during the conference ‘The role of the non-banking financial markets in supporting economic growth’, organized by the Financial Supervisory Authority (ASF) at the Academy for Economic Studies (ASE) in Bucharest.

He noted that financial markets are essential for economic development and that without ‘deep’ financial markets risks may not be controlled.

“The stock market, the non-banking financial markets – they are essential for economic development. They are financing alternatives, basic elements for the deepening of financial markets,” the BNR head said.