I consider there is large space for this partnership to expand, also based on new challenges from the European agenda. As always, this event centers around the EIB’s Investment Survey, an excellent country analysis conducted by EIB experts. The conclusions of this survey represent a welcome addition to those of our central bank’s own survey on the access to finance of non-financial corporations in Romania. Our survey captures the opinions of the real sector on: (i) the most pressing problems that firms are facing in their activity; (ii) the perception on the financing cost; (iii) the perception on the implications of a possible appreciation/depreciation of the local currency; (iv) the perception on the impact of climate change. Coming back to the EIB, its Investment Report analyzes the state of investments in the EU in the pandemic, climate change and digitalization context. The EIB’s survey shows that Romanian firms have become more optimistic, with more of them expecting to increase investment rather than the other way around. It’s good to hear this, yet we are also aware that Romania has more work in several aspects. This is the case for areas like innovation activity and access to finance. However, we see that a large percentage of Romanian firms have already invested or plan to invest to tackle the impact of climate change, putting Romania ahead of the EU average. We concur with the EIB Investment Report that the COVID 19 represented a massive shock mitigated by a bold policy response.
The loss in housing-related wealth from cycle peak to trough is staggering, something of the order of USD 7 trillion. 1 Part of these losses are paper losses, since not everyone entered the market at its peak and a portion of these losses have been absorbed by households themselves; the rest must be borne by financial intermediaries. To this day the worldwide write-downs by the financial sector, including, but not limited to recognised losses from the housing sector, are estimated at USD 1.7 trillion. 2 However, we are still counting, as the latest results published by some of the world’s major financial institutes reveal. There have been many examples of real estate crises in the recent past, including one in Switzerland in the early nineties. What distinguishes the current crisis is its breadth and international character. These two characteristics are intimately related: the rapid expansion of subprime mortgages and the internationalisation of the mortgage-based financial instruments brought international capital to the US real estate sector. This capital helped inflate the property bubble in the first place; it also explains why the subsequent crisis turned into an international financial market event and then into a global economic crisis! A quick back-of-the-envelope calculation comes up with a figure for lost flow income of at least 10% of world GDP. We have escaped a new Great Depression, but in the end worldwide income losses have probably exceeded the income losses associated with the Great Depression.