Romania’s banking system, not affected by international turmoil

Bankers must make use of hedging products more often to avoid currency exchange risks, noted Danila. The BCR official said competition on the Romanian banking market is increasing, as the country is one of the main battlegrounds for international players at the moment.

Danila said the potential of the Romanian market is high yet financial mediation services are still at a low, as bank assets had a 51 percent share of GDP in 2006. Other countries in the region exceeded the 100 percent limit, according to Danila.

The brisk widening of the current account deficit, especially in the lat year, shows the Romanian economy is still in need of restructuring and investments so that its competitive position on the European market will strengthen.

Danila expects this year to be exceptional in terms of mergers and acquisitions performed in Europe. The official noted the privatization of former state banks in the region has bolstered acquisitions in the banking system.