EnglishAna Săbiescu
Banks should foreclose on bad loans immediately and sell the collateral for the current market price, even if such price is low for the time being, instead of trying to prolong the process in order to avoid recapitalization, according to financial advisor Dan Bunea.
Bunea, who was a vice president of the Banca Comerciala Romana (BCR), believes that "banks are currently trying to cosmeticize the bad assets instead of starting to reorganize their portfolio. "Banks are trying to avoid that, but I believe that they are lying to themselves if they postpone that moment too much," Bunea added.
His explanation is that banks should get rid of the bad assets, even if they have to sell the collateral below the market value. Another problem would be that banks have "forgotten" to revaluate the collateral attached to ongoing loans and kept the value logged last Autumn, as said Nicolae Cinteza, Director of Supervision of the National Bank of Romania. According to Cinteza, the overall value of bad loans could peak in September - October 2009, driven especially by small, unsecured personal loans.
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