Subscribe
For years, the explanation Romanians were handed for their punishing loan payments was almost theological. ROBOR went up, ROBOR came down, and you simply paid, as if the number fell from the sky rather than from a room full of bankers. This week, Romania’s Competition Council finally put a price on that fiction: 3.73 billion lei, around 710 million euros, divided among the ten largest banks in the country. It is the biggest fine the watchdog has ever issued, more than three times its previous record when it fined the fuel companies in 2012.
To understand why this matters, you have to understand how a Romanian in 2016 could sign a loan at 3% and find himself paying 10% by 2022 without a single line of his contract changing. The bank’s margin was fixed and printed in black and white. The variable part was ROBOR, supposedly the rate at which banks lend to one another. Except they barely do. Less than one percent of the banks’ actual volumes pass through this channel. So, millions of people, companies and even public institutions were tying their monthly survival to a number that reflected almost no real transactions at all, a theoretical figure, thin as paper, that nonetheless dictated the entire lei lending market.
And here is the part the banks would prefer you skim past. Every morning, during the fixing window, the same handful of institutions could watch each other’s quotes before locking in their own. They shared methodologies. They exchanged confidential, strategic information about pricing. They had standing channels of communication. The Competition Council, after an investigation that ran for years and produced a file of nearly 700 pages, concluded that this choreography basically tampered with the index and that it pushed ROBOR up. Call it whatever softening euphemism you like. When competitors stop competing and start coordinating to increase the price you pay, that is a cartel, and the people paying for it were the Romanian public.
The bill, bank by bank, tells its own story. Transilvania Bank was hit hardest at 875.74 million lei (including the penalty inherited from OTP Bank). BCR drew 577.36 million, Raiffeisen 442.49 million, UniCredit 431.03 million, BRD 412.47 million, ING 405.91 million, CEC 332.98 million. The fines run between 5% and 7% of each bank’s revenue. These are not symbolic taps on the wrist and yet, as the Council’s own president noted, the sector has been so profitable in recent years that paying up won’t change how any of these banks operate. That sentence alone should make every borrower’s blood pressure rise.
Raiffeisen deserves a paragraph of its own, because its name keeps appearing in this story. This is not a bank caught off guard by a one-off scandal. Romania’s consumer authority won definitively, all the way up to the High Court, against Raiffeisen for hiking interest rates automatically a year into contracts signed between 2006 and 2008. The clients were never told, in advance, how high the cost would climb. The Constitutional Court ruled against the bank in 2016, forcing it to modify abusive clauses across its portfolio. Courts have stacked up decisions against it on illegal administration commissions and unilateral interest changes and consumer lawyers still estimate hundreds of thousands of its contracts have never been tested for abusive terms. One bad ruling is misfortune. This many, across this many years, is a method.
Which brings us to the most galling part of the whole affair. The banks have already begun announcing, almost in unison, that they will contest the decision. BRD says it will use every legal avenue available. Exim insists it merely followed the central bank’s rules. The Romanian Banking Association lines up behind them. There is a grim comedy in watching institutions accused of acting in concert respond, once again, in concert. They are betting on the Romanian courts and on time because appeals here routinely drag on for around five years. The Council, for its part, says its success rate at the High Court sits above 90%, and that the case was coordinated with the European Commission before it ever landed. They don’t bring cases like this, Bogdan Chirițoiu noted, unless Brussels has already validated them.
And Brussels has seen all of this before, which is the comparison that should embarrass everyone defending the Romanian banks. The European Commission fined Barclays, Deutsche Bank, RBS and Société Générale a combined 1.49 billion euros in 2013 for rigging EURIBOR, the euro-zone cousin of ROBOR. Three years later it added 485 million euros against Crédit Agricole, HSBC and JPMorgan for the same conduct. In 2019 it fined five banks over a billion euros more for collusion in foreign exchange. The mechanics were identical to what happened here: traders in chatrooms, nudging each other’s submissions, congratulating one another when the number landed where they wanted it. The difference is that Western Europe treated benchmark manipulation as a serious offense against the public a decade ago. Romania is only arriving at the party now and its banks are acting as though being asked to the party at all is an outrage.
This is the deeper scandal beneath the headline number. Romania is one of the few countries on earth where the population is impoverished almost as policy: squeezed by the highest fees in Europe, paid deposit rates that sit stubbornly below inflation, and made to service a benchmark that barely exists. The fine is a start. But notice what hasn’t happened: nobody is automatically returning a leu to the people who overpaid. Each of them, if they want justice, will have to sue. Hundreds of thousands of individual lawsuits. That is the price of a cartel the banks still refuse to admit was one.