A View on Financial Leasing

Introduction

I have chosen to present this book because by its’ content it approaches a lot of actual subjects regarding the diversification of some modern ways of financing, also containing some problems harmonized with Basel II Agreement, the settlement and supervision of the financial-banking market, the adequacy of capital of some credit and financial institutions, the analyse of the specific risks and exposure on financial conglomerates.

This book represent the result of authors’ experience in the financial-banking system of more than 15 years, with an active involvement in the leasing market from Romania since its’ beginnings, in 2003-2005 also having the quality of President at ASLR and representing the national leasing market.

The leasing market became an element almost indispensable in financing investments and for a real economic growth. The use of financial leasing as a modern way of financing the industrial sectors, pointed out by Cornel Coca Constantinescu in his paper work, “Leasing financiar, realitate is perspective”, represents a necessary and useful approach, mostly in the Romanian context of consolidation and reinforcement of the market economy’s functional nature. This book represents the result of a lifetime experience and research in banking and leasing activity and that is why I consider that is very important to mention some of authors’ achievements in this domains. He has a Doctor degree in Economics, he is the President of Romexterra Leasing IFN SA, the President of Honour of “Asociatia Societatilor de Leasing din Romania”, Manager of Romexterra Bank, An Account Expert in the “Corpul expertilor Contabili Autorizati din Romania”, graduated some studies at The Bocconi University-Milano, George Washington University, The National Institute of economical techniques from Paris, Reading University in U.K., he is a member of “Who’s Who of Professionals Society” from 2003, he is an Organizor and Lector of postuniversitary courses, Lector at seminaries and conferences organized on national and international level, author of some studies and articles regarding the internal and international leasing market , member of “Grupul de reflectie privind economia pe piata functionala“ from The Chamber of Commerce and Industry from Romania, Spokesman of leasing industry from Romania at LEASEUROPE in 2003-2005.

By dimension and firmness, this paper work is the proof of authors’ solid experience and ample documentation in the leasing and banking system. The ideas, synthesis and orientations are grounded on the rich lecture from not only the references manuals but also statistic and forecast studies from national and international publications and from the best known magazines in this domain. It is outstanding the research that the author did in the evolution of leasing market in the recent debates regarding globalization, the European integration and consolidation of the international markets. The information is well structured in 6 chapters, each one ended with a paragraph in which the author summarizes all the information given in that chapter. The chapters are the following: I. Contemporary leasing. Concept, Types; II. Evolution and Tendencies in Leasing; III. Organization, Regulation, Authorization and Supervision of Leasing; IV. Capital Adequasy of Leasing Companies.Problems and Solutions; V. Risks in Leasing Activity. Prevention and Protection ; VI. Prices, Costs and Income, Assets and Liabilities in the Leasing Activity.

Contemporary leasing. Concept, Types

As the title suggest, this chapter is divided in two parts: the first one present the conceptual framework and the second one presents the types of operations, leasing companies and markets. The author places in time the appearance of the leasing activity, pursues its’ evolution until nowadays, explains the differences between operational and financial leasing and the book-keeping approach. After defining the process of leasing, C.C.Constantinescu identifies its’ component elements insisting on the role and significance of the residual value. In my pinion this chapter offers the most valuable information in the entire book regarding the differences between the most known and used ways of financing: leasing and a banking credit. I found this comparison relevant and useful for those who are interested in investing, as the information given is very clearly presented and sustained by Romania’s legislation and opportunities and common examples (the purchase of a car). As for the types of leasing, the author believes that they are a result of the leasing evolution correlated with the need of its’ beneficiaries and different types of markets.