Da, am fost si eu in piata

by Steven van Groningen on 6 February, 2017

Martea trecuta, seara, ma suna unul dintre copiii mei. “Tata! Ai auzit?” Si imi povesteste despre ordonante. ”Mergem in piata! Veniti si voi?”

Era tarziu si am lasat copiii sa se duca singuri.

Miercuri am inteles mai bine despre ce este vorba. Aveam 30 de musafiri acasa, dintre care multi s-au grabit sa ajunga in piata. Era tarziu cand am ajuns si noi, iar in partea opusa a pietei erau deja incidente pe care fortele de ordine incercau sa le aplaneze. Asa ca nu am stat mult. Totusi am ramas impresionat de ce am vazut si ne-am dus in continuare in fiecare seara, cu familia.

Prezenta mea acolo este o decizie personala. Inainte de a fi presedinte de banca sunt tata si imi pasa de viitorul copiilor mei si al tarii in care locuiesc. Nu cred ca din acest punct de vedere exista vreo diferenta fata de cei  cu care m-am intalnit acolo – clienti, prieteni, parteneri de afaceri, antreprenori, sportivi, inca o campioana olimpica, angajati. La fel ca in cazul lor, dorinta mea pentru un viitor mai bun pentru copii mei, intr-o Romania mai prospera, este total legitima.

Inteleg ca faptul ca imi pasa de ceea ce se intampla in Romania, tara unde am locuit 20 de ani si care pentru mine este acasa, ii deranjeaza pe unii. Am vazut reactii de indignare de la politicieni, declaratii ca ”nu este corect” sa ma aflu acolo.

Da, sunt si presedinte de banca. In acest rol, imi pasa de cele 5.500 familii de romani care depind de salariul de la banca, imi pasa de viitorul lor, dar si de cele 2 milioane de clienti care ne-au incredintat economiile lor si de cele 30.000 de companii finantate de banca.

Politicienii nu ar trebui sa fie surprinsi de pozitia mea. De cel putin 10 ani am acelasi discurs.

Pentru a crea valoare, pentru a creste productivitatea care ne va permite sa platim salarii mai mari avem nevoie de un sector privat performant. Afacerile au nevoie de un mediu predictibil, fara schimbari importante de legislatie facute peste noapte. Orice schimbare trebuie discutata cu cei afectati, printr-un proces amplu de consultare. Orice propunere legislativa trebuie facuta pe baza unei analize de impact – o alta prevedere legala care adesea nu este respectata de politicieni. Mediul de afaceri are nevoie de o perioada rezonabila de implementare a legilor.

Cu alte cuvinte, avem nevoie de dialog real, nu doar sa ne prefacem ca dialogam.

In ultimii 10 ani s-au schimbat prea putine din acest punct de vedere. Dialogul este evitat. De ce sa ne obosim cu contraargumente, daca este mult mai simplu sa discreditam sau sa insultam orice voce critica?

Ad hominem nu este un semn bun cand este vorba despre un proces democratic.

Imi pasa. De aceea am fost in piata. Era de asteptat ca unii vor exploata prezenta mea intr-un mod total previzibil. Este un risc  pe care mi-l asum.


Datio in Solutum (2). Competition

by Steven van Groningen on 11 February, 2016

Recently I was asked by a television station to confirm that we, in anticipation of the Darea in Plata law, had increased the down payment for our standard mortgage loans from 15% to 35% (40% in EUR). I did this and explained the reasons why. I also explained them in a previous post. This became news, as if such a move was totally unexpected, and drew a series of comments and reactions.

The initiators of the law didn’t comment on my motivation/argumentation. Consistent with their earlier behavior, they preferred not to be bothered by facts and logic and to follow their long standing practice of insulting and threatening their opponents.

It was almost comical to see the statement of one of the supporters of the Darea in Plata law: he had notified the Competition Council. As if the Competition Council doesn’t read the papers and needs encouragement to follow what is happening in one of the most important sectors of the economy.

Darea in Plata will reduce competition

Instead, maybe he should have asked the Competition Council to express an opinion on the Darea in Plata law itself. If the Competition Council would analyse the potential impact of this law, which I warmly recommend them to do, they might conclude that one of its effects is that it will reduce the competition between banks.

Mobility Encourages Competition

An important element in stimulating competition in any sector is the ease with which a consumer can move from one provider to another. This is valid in any industry, banking included. There are specific regulations, including EU Directives, that aim to makes it easier for consumers to switch banks. The easier it is to switch for consumers, the more competition between banks is stimulated. Logic.

Darea in Plata Hampers Mobility

What is now the effect of Darea in Plata on all this? 67% the total loans to individuals in romania are mortgage or home equity loans. When a person contracts such a loan, he/she has the obligation to repay it, including interest, and responds with all his belongings. In these circumstances, banks have worked with down payments from about 5-15%. If and when Darea in Plata comes into force, all new mortgage and home equity loans will be asset-based financings in which the risk of the bank is linked exclusively to the value of the asset. This is a totally different risk profile which will force banks to adjust their risk policies. As I explained here, this will increase the need for down payments.

Refinancing Anyone?

It is not very difficult to see that those who took loans with lower down payments (5-20%) will not be able to get refinancing unless they meet the new criteria (say 35-40% down payment). Very few consumers will be in the position to make an early repayment of  20% of the value of their loan in order to refinance.

So, Darea in Plata basically makes it impossible of anyone who took a loan from a bank before Darea in Plata to refinance this loan and will lock more than 450,000 Romanians in with their loans at their existing bank. No refinancing possible. Please come back in 10 years or so.

Who seems afraid of the Competition Council?

So, I am not afraid that the Competition Council will look at the fact that banks increase down payments. This is a matter of cause and effect and pure logic. I am afraid the Competition Council will not be asked by the initiators to express an opinion on the Darea in Plata law. If they were, they would certainly come to the conclusion that this is bad for competition.

Due process, including impact study is needed.

As before, there are reasons, good reasons, why no country in the world has legislated a “hard” datio in solutum. If we want to consider being the first in the world to do so, we better think this through. At least we might ask Parliament to respect the law and to produce an impact study and ask relevant stakeholders, including the Competition Council, to express an opinion.

Romanian version is available here.


Datio in Solutum (1). Down Payments

February 5, 2016

Datio in Solutum is a Latin legal term. It means “giving in payment” and it refers to the situation in which someone with financial difficulties and debts gives something else he owns instead of money to repay his debts. An example I remember from not too long ago in Romania was a bank that could […]

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Money for Nothing (and Cheques for Free?)

November 1, 2014

“Money for nothing” is the title of a song made famous by Dire Straits when I was young (we are talking 80’s here). The song refers to the easy way a rockstar makes his money compared to other “regular” people, and some of its lyrics – “money for nothing and chicks for free” – are […]

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Should I Stay or Should I Go?

October 3, 2014

“Should I Stay or Should I Go?” is the title of a song made famous by the British rock band The Clash in the early eighties. I remembered the title of the song and looked up the lyrics the other day. It is not a question I ask myself a lot (I intend to stay), […]

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Back on the Road

September 26, 2014

Comebacks are risky and, more often than not, they refer to ambition rather than achievement. After 18 months of absence, my ambition is to post at least twice a month on my blog again. I hope this will also translate into achievement. Why I stopped The easy answer is: not enough time. This is not […]

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Romanian Non Performing Loan Levels Are Inflated

February 18, 2013

  Non Performing Loans (NPLs) are loans that have payment delays of more than 90 days. NPL’s lead to provisions and to credit losses. That is why the level of NPLs, expressed as percentage of total loans, is an important indicator for the health of the financial system in a country. They are closely monitored […]

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December 29, 2012

I wanted to write about the cost of fraud in the banking system but because I have taken the rest of the year off, I decided to pick something that is totally unrelated to work, namely fasting. Before Christmas I did a six day water fast, that means that for six days I didn’t eat […]

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10 Things I Learned From Being A World Class Athlete

December 14, 2012

Many years ago I was a successful athlete. I participated in two World Championships and the 1984 Olympic Games. Today I am a successful CEO. You can find more about me here. Sometimes I am asked about parallels between sport and business so I decided to draw up this list of 10 things I learned […]

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Government Wish List

December 6, 2012

When I was a little boy in the Netherlands I used to make a wish list for Saint Nicholas. (In Dutch Sint Nicolaas or Sinterklaas, also Americanized to Santa Claus, but that is a different story). In early December each family member would place a shoe (one) in the evening in front of the fireplace […]

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