CONTEXT:

• The banking system, the capital market and the insurance market are expected to finance economic prosperity, in a period full of challenges.
• In many respects, the financial markets are strengthened compared to previous years. Banks have strengthened their balance sheets, achieved very good results that allow them to support financing in the real economy. The stock exchange saw its liquidity improve and marked an exceptional moment by listing Hidroelectrica, and the insurance market overcame a new difficult moment in the RCA segment and is looking to get back on a healthy footing.
• The economic context remains, however, a problematic one. The persistence of high inflation puts increasing pressure on disposable incomes, tempering consumption and transmitting effects to credit demand. The population and firms are much better prepared than in the past to adapt to difficulties, so bad loans have remained, at least so far, low.
• Capital is, however, increasingly expensive, in a country where local businesses are in great need of capitalization. The era of cheap financing is over, and the economy is adjusting on the fly to the reality of rising interest rates. Decisions are carefully measured by central banks, which must balance, in a fragile balance, the need to reduce inflation and reduce the risk of a recession.
  The government, pressed by the huge burden of the budget deficit, is passing on its problems to the economy. The latest package of fiscal measures, aimed at patching up public finances, is affecting the business environment, including financial markets.
• Banks received the “gift” of a special tax of 2% of turnover, which will be added to the profit tax, a measure to which they will have to adapt by carefully weighing how much of the additional costs they can pass on to customers, and they affected during this period.
• The fiscal measures also have an impact on the capital market, and on the insurance market, and for pension funds, which see their development prospects undermined again.
• Solutions to economic recovery and growth, in a difficult environment, can only work by involving the financial markets, regardless of whether it is actions in the area of government support programs or private sector initiatives.
• Hope for future growth is placed in the financing that will be attracted through the PNRR, a plan in which the involvement of the banking system is essential.
• The program has, however, delays in implementation and substantial efforts are needed to avoid ticking again, as in the past, another loss of funds and development opportunities. In a period marked by uncertainty, from which there are also geopolitical tensions or the approach of wars, the managers of financial institutions are looking for solutions not only for adapting to the difficult economic, social and political context, but especially for reinvention and innovation in a world in rapid technological change.

DISCUSSION TOPICS:

Panel 1 – Challenges for bank financing

• The evolution of banking indicators. Growth prospects for lending and saving. Implications of rising interest rates.
• Changes in risk assessment.
• Consolidation pressures in the banking system. Wave of mergers and acquisitions announced after a long period of waiting. Outlook for big and small banks.
• Impact of legislative changes aimed at the banking system.
• What effects will the new fiscal measures have in the banking system.
• The implications of the new measures to limit the use of cash.
• How the customer relationship with the bank has changed.
• The outlook for government guarantee programs, which back much of bank lending. What is going well and what improvements are needed.
• Entrepreneurship support by banks.
• How the transformation of banking networks and digitalization of services continues.
• The banking products of the future, the innovations that change the market. Banks’ profitability outlook, after a period of exceptional results.
• Outlook for monetary policy and central bank supervision.
• Financing of large infrastructure and strategic projects.
• Challenges for state financing, in the era of huge deficits.
• Cyber Security Challenges.

Panel 2 – Challenges for stock exchange, funds and insurance

• Evolutions and prospects for the stock market, in years of rising interest rates and volatility in the markets.
• Has the stock market capitalized on the opportunities that arose after gaining emerging market status?
• How do international tensions affect the Romanian capital market? What domestic measures can mitigate the problems?
• The impact of Hidroelectrica’s listing on the stock exchange.
• Challenges for stock market liquidity. New listings. Impediments and solutions. New measures needed to further unfreeze the primary offer market.
• The impact of the new fiscal measures on the markets. How will the new tax regime influence the attractiveness of the market and how can the base of individual investors be broadened? How can individual investors be persuaded to come to the capital market, to have access to better returns, in a context where interest rates are also rising in the banking market.
• Effects of fiscal measures in the private pensions market. Will construction and IT employees for whom the contribution becomes optional continue to contribute to Pillar Two?
• Challenges for private pension fund investments in volatile markets.
• Changes in investment policy and necessary changes in legislation for pension funds.
• How can investment funds enhance the available resources of Romanians in this difficult period?
• Overcoming bottlenecks in the bond market.
• Challenges for government securities and bond portfolios in the context of rising interest rates.
• What will the derivatives market look like and what liquidity will we be able to count on in the coming years?
• What impact does the crisis have on the activity of insurers? Which policies are customers turning to?
• Perspectives for health insurance, in the context of changing customer behavior after the health crisis.
• Solutions so that the market is no longer overwhelmingly dominated by compulsory insurance. Protection of life and health (voluntary) vs protection of property (imposed by law).

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