Romania’s moribund non-banking sector has recently begun showing signs of life. Mortgages have exploded, leasing is picking up and the insurance sector is shaking off years of patchy performance and weak regulation. The boom seen recently in life insurance is reason to believe that the reform of the pension system might yield the benefits required for Romania’s financial markets to benefit, at long last, from a sustainable flow of liquidity.
Though starting from a very low base, decreasing interest rates and longer maturities have propelled the Romanian mortgage loan market in the past two years. Some banks, including the Greek Alpha Bank, the Austrian Volksbank and the Dutch ING Bank are even offering maturities as long as 20 to 25 years – an unthinkable proposition just a few years ago.
