Q1. What would asset managers need most as incentives from a new economic thinking to become more successful in Romania?
I think the most important incentive that both asset managers and entire Romanian society need, is a switch from a short-term, opportunistic mental framework to a long-term oriented, economic development framework and a strategic planning of the future. This definitely sounds easier said than done and it is a difficult task in our times, characterized more than ever by high speed and probably the lack of patience. It’s like working on a large puzzle, if you set your mind to it, you can finish it and you will also find that some fitted pieces of the puzzle help progress much more than others. One such “game changing” piece has already happened with the introduction of the private pensions system, but others should also follow. A more stable and coherent economic policy framework (monetary, regulatory and fiscal) would be one; another one is introducing financial education as part of the broader education curricula.
Q2. What’s the biggest advantage for an asset manager attempting to do business in Romania? What about the biggest deterrent?
The lack of a long-term investment culture is in my view, both the biggest advantage and the biggest deterrent for asset managers that are doing business in Romania. A deterrent, because the Romanian public is lacking a savings discipline and they have been used to only two approaches to investments: on the one hand, keeping the savings super safe, in cash or bank deposits with no price volatility, or, on the other hand, gambling them on a few stocks or private businesses. The experience of other countries in our region nevertheless suggests that financial behaviors can change. In Romania’s case, I believe that there is a lot of potential for asset managers to capitalize on changes that involve a more diversified and more strategic approach to personal investments. In order to get there, however, asset managers but also financial products distributors will have to continue investing in the financial education of the general public.
Q3. What do you make of the establishment of a sole financial supervision authority that shall monitor the insurance, capital market and pension funds altogether? Is it going to help your business, and, most importantly, is it going to help the society and economy?
It is difficult to make out something of the new combined financial watchdog as long as important details regarding its functioning are still to be worked out. An important positive side is that it would make regulators and the whole society to realize the synergies among different areas of financial services business. Also, there is a potential for a more integrated approach to financial regulations and supervision to be more supportive of market development, by making better use of available information and ultimately boosting confidence in the whole local financial system. On the other hand, there is some sense of rush regarding the creation of this new institution, while I would have expected that, the launching of such an important project might have taken more time and involve more details. However, we hope for an easy transition period and we are looking forward to cooperating with the ASF.