BNR Governor Mugur Isarescu’s four recommendations for commercial bankers

Romania’s central bank governor Mugur Isarescu spoke to an audience of over 150 bankers during the Banking Compliance Summit organised by the Romanian Banking Institute. As part of his speech, Isarescu listed four recommendations he had for commercial bankers.

Plan serious debates, don’t fall for the nonsense dominating the media, because the media seeks sensationalism, everywhere in the world

“Coming here today I remembered something that is worth mentioning here. It’s a paper about giving in lieu of payment, written by a group of important people, headed by Valeriu Soica. It’s not a criticism, but the paper should have been debated here. Don’t let in the nonsense dominating the media. We’re not accusing the media here, but it tends to look for sensationalism and not just in Romania, but across the world. Such papers should have been in the public space. The active and efficient presence in the legislative process of the banking industry with the BNR are compliance functions – the theme of this conference, however you want to take it.

Because this compliance role means following the law. If a law is passed, we must be the first ones to apply it! But we must lead an honest fight so that legal aberrations don’t get passed,” said Isarescu.

Use social networks as they’re becoming more important

“Social networks play an extremely important role and if you don’t know how to use them to your advantage, you’re lost.”

The reputation of banking systems is damaged across the world. Start by educating and understanding your clients!

“Compliance must start from an institution’s fundamental values – whether it’s a central bank or a commercial bank. After a deregulation period (from the 80s to the previous crisis) a re-regulation period follows. I’m not saying we’re in an overregulation period, but it’s clear that markets are being regulated more,” he said.

“Compliance is more efficient in regulation periods as long as all employees follow the law and contribute with honesty and integrity to creating respect for banking norms. This way, compliance becomes an integral part of banks’ activities. The reputational impact of declining trust – which is very serious since financial institutions work based on trust – is something to be very careful about.

Stop blaming the central bank for the lack of communication by commercial banks!

“Our collaboration with the banking system is dominated by discussions about the ROBOR. Before, it was all about the exchange rate, now it’s the ROBOR. It’s a product made by you, the market. And it’s now the BNR’s problem. It’s not the first time. We calculate it, but based on the data you provide and should explain – we shouldn’t be the ones providing the explanations,” said Isarescu.