mugur isarescu : opening speech – conference “ investment and investment finance in romania ” opening speech by mr mugur isarescu, governor of the national bank of romania, at the conference “ investment and investment finance in romania ”, organized by the national bank of romania and the european investment bank, bucharest, 13 february 2020. * * * vice president mcdowell, state secretary gyorgy attila, distinguished audience, ladies and gentlemen, it is a pleasure for me and the board of directors to welcome you at the national bank of romania, to the conference dedicated to investment and investment finance in romania. this conference has been organized by the european investment bank in partnership with the national bank of romania. in fact, this partnership has had a long standing as a pillar for progress and investment in romania. please allow me to express a heart - felt welcome and to extend my warmest thanks to mr. andrew mcdowell, vice - president of the european investment bank and to ms. debora revoltella, chief economist of the european investment bank, for their continuous support and deep commitment to develop investments in romania, and, moreover, for being trusted partners and friends. i am glad that we have decided to co - organize this conference here in romania, at the central bank, as this year we honour two landmarks with historic importance. one is the national bank of romania ’ s 140th anniversary and the other is the 20 years ’ celebration of the day ( february 15th 2000 ) when the eu formally started the accession negotiations with romania. i remember that moment vividly, as it happened during my mandate as prime minister of romania. as a veteran, in office since 1990, i am fully aware to what extent romania has benefited from the significant support provided by the european investment bank. the projects financed by eib proved to be a catalyst for development, with a multiplier effect in all the economic sectors. nevertheless, romania continues to need ( i ) to develop solid growth strategies based on investments and ( ii ) to accomplish the development priorities in infrastructure, healthcare and small and medium enterprises ( smes ), as well as ( iii ) to enhance cohesion with the other eu member states. the future will certainly bring challenges as well as opportunities. one opportunity, as per the latest european investment bank ’ s flagship report on investment, is the present context of low interest rates, which could provide support for speeding up lending and investments. there is adequate room for upscaling public investment in areas such

we still need to develop the analysis capacity, the european investments absorption and the acceleration of funds distribution in the romanian economy. the cooperation and the technical assistance for co - financing of investment projects under the multiannual financial frameworks 2014 – 2020 and the next one, as well as the active role played by the european investment bank in the approval of structural funds under the juncker plan in romania are key priorities to ensure the enablement of economic growth potential in action towards sustainable economic development. the partnership between the european investment bank and the commercial banks in romania ensure the effective transmission mechanism to allocate and distribute the european structural funds to the infrastructure projects, to the development of production capacities of the small and medium enterprises and to the creation of new jobs in the economy. the banks are well capitalized, have an excellent solvency and a superior liquidity, prerequisites for co - financing the companies and the economy. the loan - to - deposits ratio is below 100 %, indicating available resources for financing. nonperforming loans have decreased more than three times, from 22 % to about 6 %, showing a positive trend in a healthier internal ratings model and a sound balance sheet position, while the lending dynamics for companies is below the european average. we have the potential to accelerate the access to finance to support investments as a base for economic growth, instead of a consumption driven growth. this potential is demonstrated by the low financial intermediation in romania, around 29 %, although this percentage can be misleading, as large corporations usually access financing directly abroad, from the headquarters or from the financial institutions in the countries where they are headquartered. the more prudent lending policies and the risk aversion of commercial banks are factors that could be perceived as a break in financing investments at full capacity ; however there is a positive side, too. it is a safe approach to credit as a driver of economic growth, as credit ( lat. “ credere ” ) supports regaining the trust in the financial system and in the banks as institutions that 2 / 3 bis central bankers'speeches ensure the allocation of funds to the private and the public sector. companies in romania, as beneficiaries of european funds, need to respond to some pressing issues such as inadequate management and financial discipline. only around 15 % of small and medium companies are eligible for financing, with a management team capable to conduct a lucrative activity that reflects in a sound set of accounting documents, like the balance sheet and