NBR: Pension funds will change Romanian’s financial landscape
The private pension funds will change the financial landscape of Romania and will accelerate the stock market development, as well as the bonds market’s growth, state the National Bank of Romania experts, in the Financial Stability Report (2008 Edition). According to NBR, the private pensions markets’ growth will be “substantial” in the following years, while the pension funds will massively invest in state bonds and on the capital market.
“Our forethought is we shall witness significant changes of the financial system structure in the near future, brought by the debut of the mandatory pension funds during this year. The growth rate of the assets managed by the pension funds will be significant, as in the first functioning years there will be no substantial payments. In the same time, private pensions will underpin the financial investments on the capital market. Consequently, we expect a slight adjustment trend of the financial sector in favor of the capital market” states the mentioned report.
Analyzing both the insurance and the private pensions markets, the central banks experts concluded that “the start of the voluntary private pensions market (3rd pillar) slowed down the development pace of the insurance market”. On the other hand, the pension funds business will stimulate the state securities market, by the strong growth of the long term maturity state securities demand. The reason for that, according NBR’s experts, is that “mandatory pension funds are looking for a high safety level of their long term investments, which makes the long term maturity state securities very attractive.”
