Steven van Groningen: The side effects of GEO 114 worry us most

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Companies have postponed their investment plans due to GEO 114/2018, and that should worry the most, says Raiffaisen Bank’s president, Steven van Groningen.

“There are some money we transfer to the budget, many, too many, but that’s not the main issue, but what will be the side effects. That is affecting economic growth in certain segments of the market … many have postponed investment plans because of concerns that it will increase the cost of funding. There are discussions in other segments … energy, telecom. Obviously, the secondary impact will be much higher than the direct impact on the financial system,” says Raiffeisen chief, quoted by profit.ro.

The context in which it would be possible to outsource some loans to parent banks.

In an impact study conducted by the NBR, in all alternative scenarios, the central bank included as a prerequisite the outsourcing of 25% of the assets of foreign-owned banks in the groups they belong to.

Van Groningen says it depends on how the GEO 114 changes will be made: “We will see if there will be changes to GEO 114. It would be ridiculous to have a legislation that would discourage the financing of the real economy, making it better in some cases to outsource loans and buy government bonds.”

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