If you don't find economics interesting, don't read this. There are a couple of local wrinkles that complicate the credit situation here in Romania. The biggest one is that National Bank of Romania (Romania's Fed, more or less) has placed a lot of restrictions on the movement of credit. Some of these are stupid remnants of the bad old days of the command economy. Others, though, are entirely rational. The NBR is legitimately concerned about a currency crisis.
See, the banks would love to borrow on the international money markets. Romania is capital-starved, so interest rates here are really high. That means that the banks can go outside the country, borrow euros or dollars at low western interest rates, and then turn around and lend them to Romanians at much higher rates of interest. We're talking, like, borrowing at 5% and lending at 16%. Even given high risks and administrative costs, this is still an incredibly tempting and lucrative scenario. But. When the banks loan money to borrowers in Romania, those loans are in Romanian lei. So, picture this: a Romanian bank goes to, say, Frankfurt, and borrows 50 million euros at 5%. It converts the euros into lei -- 1 euro is about 40,000 lei, so it would be two trillion (!) lei. It lends the money out, collecting 12% interest. (It will be charging more than 12%, but some of that will be eaten by nonperforming loans and administrative costs.) For the first year, the Romanian bank will owe 2.5 million euros of interest to Frankfurt. Since it will collect (2 trillion x 12%) 240 billion lei, that's not a problem -- 240 billion lei can be swapped for 6 million euros. The bank pays Frankfurt the 2.5 million and pockets the difference: 3.5 million euros. Nice. But suppose the leu collapses? This is not impossible -- it happened in Indonesia, where the rupiah crashed to about 1/4 of its original value in about 60 days. Some of that was hysterical overshoot, but when the rupiah stabilized it was trading at a bit less than half its original price. Imagine that the leu suddenly crashes to 100,000 to the euro. The Romanian Bank is still collecting 240 billion lei per year. But those lei will only buy 2.4 million euros. Now the Romanian bank can't even cover the interest payments on its foreign loans. The bank is bankrupt. Even a more modest drop -- say, from 40,000 to 60,000 -- would seriously trash the banks. They'd still be able to make interest payments, but their profits would disappear -- and they'd find it very, very hard to pay back the principal of loans that had (from their point of view) suddenly increased by 50%. This is not an idle fear; it has happened several times in various places around the world. So the NBR places fairly sharp restrictions on the ability of Romanian banks to borrow foreign currency. Of course, this in turn restricts the growth of lending -- the more Romanian banks have to rely on local deposits, the less they can lend. But that's a price the NBR is willing to pay.