BNR's Olteanu: Market shows time is ripe in Romania for a personal bankruptcy law

The need for a bankruptcy law in Romania regarding individuals has become obvious, but it should be a good law that will provide more benefits than losses and that is focused on negotiations between debtors and creditors outside the court because court trials are slow and costly, Vice-Governor of the National Bank of Romania (BNR) Bogdan Olteanu told a specialist conference on Thursday.

Photo credit: (c) ALEX MICSIK/AGERPRES ARCHIVE

"The market has shown us that the time is ripe in Romania for the implementation of a legislative and institutional framework for individuals. It became ripe in hard times, when we are getting out of an economic crisis, when we seem on a rising economic trend ? which we hope will consolidate and be confirmed ? when we are living the experience of implementing legislation regarding individuals, which has triggered polarised opinions on its text; we are also waiting for the judgment of history as far as its implementation goes," said Olteanu.

He added that the implications of such a law have to be explained because it is not a one-size-fits-all solution.

"We want to clarify how we want a good personal bankruptcy legislation to look like. Firstly, I want us to understand very clearly what personal bankruptcy means and where it is appropriate. In principle, it is appropriate for those who have taken out short-term loans. For those who have taken out long-term loans, the bankruptcy law is not the solution. There should be other solutions in those instances because bankruptcy makes all debt due and forces the servicing of part of the debt immediately. That is not the most comfortable solution. In the case of a long-term loan, usually taken out for home buying, it is not the most comfortable solution," Olteanu...