Romania is the country with the lowest level of financial intermediation in the European Union, with banking assets standing at some 50% of the GDP, Eugen Radulescu, director within Romania’s National Bank (BNR), said yesterday.

The EU average exceeds 200%. Bulgaria is second to last, with 98%, followed by Poland, with around 100%.

Financial intermediation is the process performed by banks of taking in funds from a depositor and then lending them out to a borrower.

“We are below others. There are many reasons. First of all, the 70-percent question of debt service. (...) Debt service refers to how much a person has to pay out of his monthly income,” Radulescu added, reports local Economica.net.

The level of over 70% applies only to people with very low incomes. Those with higher incomes have lower credit limits, the BNR director explained.

editor@romania-insider.com