The anti-crisis strategy of Eureko Pensions

“The first difficult moment was the time when there was a very strong opinion on the market about a systemic crisis in the Central and Eastern European banking sector. There was also talk about the impact this could have on some countries, such as Austria, Italy, and Greece, whose lenders have strong exposure in this region,” Crăciun said.

The official added that the first moment was difficult not because the situation on the markets was challenging, but rather because the subjective valuations of the banking sector in Central and Eastern Europe had to be separated from the objective ones.

“Otherwise, any decision could have yielded a loss, which later on proved to have been avoidable. At such a moment, the most difficult thing is to try to react in a balanced manner, trying to see how much is reason in these analyses and how much is emotion. And to make decisions with a clear head,” the official added.

The second difficult moment came in the spring of 2009, when the stock market started to climb, in spite of weak economic fundamentals. The exuberance split investors into two camps: the optimists, who expected rebound, and the pessimists, who said that the markets will resume their downward trend. Crăciun said that this second moment was brought about by investor anxiety and the large amounts that were injected into the financial systems.