The new law on mortgage loans could disrupt the improvement of the Romanian banking system, according to a Fitch analysis.

If the law passes in its current form, it will be negative for the local banks’ activities. The retail mortgage loans will be under pressure as banks will toughen their lending rules and will demand higher down payments to protect themselves, reads the Fitch analysis.

The First House program will most probably end, if the new law includes it. In the current form, the new law applies to the First House program too. The impact would be significant, as 20% of the total retail credit is related to the First House program, reads the Fitch analysis.

editor@romania-insider.com