The size, severity and public nature of recent bank frauds presses on the need to continue reforms in the national financial system and to rethink the model in which financial institutions operate. Considering that any crisis implies a broad process of reflection on what had happened, the reforms aim at correcting the business model of national financial institutions and emphasizing their role in effectively supporting the national economy and the personal projects of the population. Also, an important aspect revealed by the banking crisis and which tends to be revised is the capacity of the state institutions to ensure dialogue, consensus and intervention capacity when deviations are detected. However, as demonstrated by the latest developments of the EU macro-financial assistance, strengthening the financial system individually and isolated from other key areas cannot fully guarantee the irreversibility of undertaken reforms. In this context, we can state that only on the background of balanced and correlated policies between all spheres of economic and social life, respecting democratic principles and the rule of law, the confidence in the financial system can be restored and the positive perspectives for the national economy can be regained.
The need for uniform rules for all financial service providers extends the reform process to other sectors less regulated to date. Thus, for the microfinance, leasing or insurance sectors, the same reform vision based on principles of transparency, sound governance, adequate risk management or accountability is outlined. Even so, the banking sector reform is advancing at a much faster pace, which leads to the emergence of different levels of regulation for institutions that essentially perform the same function –to intermediate the temporarily available financial resources from those who save money, to those who invest.
In this context, the following recommendations aim at supplementing and streamlining reform actions and relate to:
- Accelerating reforms in the non-banking financial sector – in order to guarantee a common development approach for all financial market sectors, both non-bank lending organizations and insurance companies need to implement the same activity principles as the banks. Thus, the "fit & proper" competence and integrity standards, the principles of corporate governance with clear definition of the responsibilities of the management bodies, the transparency of the shareholder structure, or the sanctions regime to discourage any intentions of fraud, need to be transposed into the specific regulatory framework.
- Increasing the financial service consumer level of protection – in order to strengthen competition in financial services, to protect consumers and avoid the risk of indebtedness, the mediation process and especially the credit cost should be as transparent and as understandable as possible. To this end, supervision bodies must ensure that financial institutions provide all the necessary information to clients, especially EAR, so that they can compare the credit cost easily, without having advanced economic training.
- Reducing informational asymmetry and increasing the role of Credit History Offices – in order to know the real situation of borrowers, all lending institutions, both banks and the NLO, should be required to provide information to CHO. This is all the more important as there is a tendency to increase the volume of loans granted to individuals, which are often borrowing from multiple sources in order to remain eligible for each of them.
- Diversifying savings tools accessible to the population – channelling the savings of the population only in the bank deposits segment creates premises for risk concentration only in the banking sector. At the same time, the national financial market registers a lack of long-term financial instruments that provide the necessary premises for inclusive and lasting economic development. In this respect, increasing the access of private investors to the VMS market can support a high and stable demand for government bonds, diversify thefinancial sector risks, and ensure an increase of the maturity term of existing financial resources.
- Adopting an extended strategy to increase access to finance – initiatives to support access to finance are too fragmented and lacking the necessary coordination so the results are modest. Also, the intermediation process is affected by a series of vulnerabilities that hinder the expansion of crediting to productive sectors of the economy. This requires a holistic approach that encompasses all institutions with a determining role in the financial system, as well as all lending incentive initiatives. An example in this sense would be the establishment of a Financial Sector Development Committee.
- Boosting the bank fraud investigation process – the recent Strategy for the recovery of defrauded goods does not provide a decisive role for the NBM, even if it is the main source of information and relationships with regulators in the jurisdictions where the money was transferred. Moreover, although it played a decisive role in investigating the way in which the bank fraud has been committed, the Kroll Investigation Agency appears to be left out as well. Under these circumstances, both the NBM and Kroll must be active partsin this process in order to accelerate the investigation and increase the credibility of the actions taken.