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Koba Gvenetadze: Extra Regulations Might Increase Financial Risks

Koba Gvenetadze: Extra Regulations Might Increase Financial Risks

We are not going back, – President of National Bank of Georgia so responds to the announced changes in the sector of online loans.

Koba Gvenetadze explains that there is a hard condition on the market, because instant loans are offered at 500%, 600% and 700%. There are cases, when interest rate of the loan is 3000% and 4000%. Despite the fact, that there might be persons, who can pay the sum, that is abnormal percent”.

The chief banker of the country declares that such practice might be changed. He shares that the country should have enrichment facilities, including quickly enrichment, but not at the expense of the public, who loses everything.

He notes that he is not against innovations, but he is really against the existence of excessive or predatory interest rates.

“Financial crisis of 2007-2008 has showed well, what the deregulations brought, which existed in the USA. Many risks have been accumulated – liabilities’ bringing on to the outer balance statement, evasion the capital adequacy ratios and so on, it is still reaping in Europe and to a lesser extent the US, who soon got a lesson. We must not be blamed that we are returning in the socialism, there are many regulations… Extra regulations are bad, but deregulations are bed as well. Extra regulations might reduce development and exceeded regulations might increase financial risks. We want the man to know, what they are doing due to a temporary problem, not to take any steps that do not appear in front of the personal tragedies and do not want to say that such people do not exist, there are such people. We are not going back. We want the situation to be normal. We should do neither excess deregulation nor not over-regulation“, – Koba Gvenetadze declared to Public Broadcaster.