mugur isarescu : overcoming economic problems, the experiences of sweden and turkey – an inspiration for romania? opening speech by mr mugur isarescu, governor of the national bank of romania, at the conference “ overcoming economic problems, the experiences of sweden and turkey – an inspiration for romania? ”, bucharest, 23 september 2013. * * * ladies and gentlemen, your excellences, distinguished guests it is a pleasure for me to welcome you to the national bank of romania. i salute the presence of such a distinguished audience : their excellences, the ambassadors of sweden, turkey, brazil, cyprus, germany, the netherlands, members of the diplomatic corps, economists, bankers, businessmen, journalists. we are honored to host this international conference : “ overcoming economic problems, the experiences of sweden and turkey : are these an inspiration for romania? ” the title is, i believe, self - explanatory. in today ’ s globalized world, learning from other countries ’ experience is of utmost importance. and while it might be true that no one really learns but from his own mistakes, one can hope that some other mistakes may be avoided when learning from other people ’ s experiences. why sweden and turkey? before answering this question i wish to emphasize that the national bank of romania is open and willing to host other conferences with similar topics. and today ’ s conference might be considered the first of a series, involving clusters of countries with relevant interactions. with reference to the question above, i can tell you that there have been several reasons to begin with these three countries, but the main reason for which we compare today the present situation in sweden, turkey and romania is due to the diligent and assiduous activity of the ambassadors of these two countries in bucharest. then, i would like to salute their presence here today : his excellency mr. anders bengtcen, ambassador of the kingdom of sweden, and his excellency mr. omur solendil, ambassador of the republic of turkey and to particularly extend my gratitude to them and to all the persons involved in the materialization of this conference. i also thank mr. klas eklund, senior economist at the swedish bank seb and adjunct professor of economics at the lund university and mr. cagri memisoglu, deputy general manager at garanti bank romania. there are, of course, historical links between the three countries. i do take this opportunity to highlight a few of them.

tasks on safeguarding financial stability. the realistic solutions are complementary and each bank may apply an adequate mix tailored to each individual case. they are equally valid for loans in other currencies as well bis central bankers ’ speeches and may be optimised on a case - by - case basis. the solutions which may be deemed as both realistic and balanced include those whose outcome is keeping the domestic currency equivalent of monthly instalments of chf - denominated loans close to the december 2014 level, with several options available to the parties to credit agreements : a. converting chf - denominated loans into lei at the market exchange rate and / or granting a discount on the debt service amount – which may be tantamount to a conversion at an exchange rate below the market rate b. temporary cut in the interest rate on chf - denominated loans in order to offset the impact of the stronger chf may be a valid option, given that both the benchmark rate of the swiss national bank and the chf market rate have reached negative values. c. implementing a debt rescheduling scheme, with the award of a compensation by the state such a solution would be efficient in light of at least four arguments. first and foremost, it would contribute to a higher disposable income of the beneficiaries of this scheme ( performing borrowers ), with favourable effects on consumption and economic growth. secondly, it represents a burden - sharing approach among creditors, borrowers and the state. thirdly, enforcing the relevant law implies favourable effects also in terms of managing the structural liquidity surplus in the banking sector. fourthly, the measure targets the segment of vulnerable borrowers, with gross monthly incomes of up to lei 3, 000, given households ’ high degree of indebtedness and its uneven distribution across various income groups. the measure proposed by the government consists in amending government emergency ordinance 46 / 2014 by extending its scope of applicability and introducing simpler and more flexible loan rescheduling procedures, and may be applied to chf - denominated loans as well. the legislative enhancements are aimed at providing some relief to low - income borrowers facing temporary difficulties in repaying their loans, while also improving the mechanism so as to be promoted by banks and requested by eligible debtors. the main proposals by the ministry of public finance to enhance government emergency ordinance 46 / 2014 refer to : ( i ) rendering the rescheduling mechanism and