Denmark's Vestas, the world's leader in the field of wind farm technology, with turnover worth above 6bn euros in 2009, decided to open an office in Romania this year considering the company has already sold turbines with a 450 MW capacity for investments in Dobrogea. After six years' research, Vestas now says it is time it started developing domestically."We have been eyeing Romania over the past five or six years, but it is now that we decided to open a local office. This is a decision that proves the domestic market has reached a certain maturity. We are in the right place at the right moment. Romania is the most promising country in Eastern Europe," says Hans Jorn Rieks, chairman for Central Europe with Vestas.
The best-known wind farms due to be equipped by Vestas are the ones being built by Energias de Portugal in two towns of Dobrogea, Pe[tera and Cernavod`.
According to Rieks, the big concern as regards the Romanian market is legislation. "The existence of clear legislation will open the market to several players as banks are always looking at something tangible and are not willing to take on risks," he says. (Z.F)
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understanding of the financial system they oversaw".
• Systemic breaches of accountability and ethics at all levels. Mortgage-holders took out loans they never intended to pay; lenders made loans they knew the borrowers could not afford.
"As this report goes to print, there are 26 million Americans who are out of work ... Nearly $11tn in household wealth has vanished ... The collateral damage of this crisis has been real people and real communities. The impacts of this crisis are likely to be felt for a generation," the report says.
So far, the 2008 financial crisis has led to few prosecutions. The authors interviewed more than 700 witnesses to compile the report and said they had referred potential violations to the appropriate authorities.
While the crisis was years in the making, it was the collapse of the housing bubble that triggered the 2008 collapse. Trillions of dollars in risky, sub-prime mortgages had been embedded in the system. When the housing bubble burst, the impact was magnified by complex financial derivatives based on those loans, whose risks had been woefully underestimated.
Behind the collapse was the rewiring of Wall Street. From 1987 to 2007, the amount of debt held by financial sector soared from $3tn to $36tn (£1.88tn to £22.5tn). Subprime mortgage loans went from 5% of loans in 1994 to 20% in 2006. At the same time, financial services firms constituted an increasingly disproportionate part of the US economy – 27% of all corporate profits in the US compared with 15% in 1980.
The crisis itself was avoidable – the result of "human action and inaction, not of Mother Nature or computer models gone haywire". And in large part it was led by government mismanagement.
The Federal Reserve played a central role in enabling the crisis. It failed in its duty to set more prudent limits. Financial firms "made, bought and sold mortgage securities they never examined". They invested blindly and did not care if the investments were defective. Compensation "too often rewarded the quick deal, the short-term gain" and "encouraged the big bet", the report concludes.
Aggressive expansion left banks unable to manage their own assets – and few escaped blame.
For Citigroup, singled out for heavy criticism, "too big to fail meant too big to manage". Goldman Sachs multiplied the effects of the collapse of sub-prime loans by funding and creating billions of dollars of bets based on the back of the loans. AIG's senior management was ignorant of the terms and risks of the insurer's $79bn derivatives exposure. It was a "costly surprise" to Merrill Lynch's top managers that their $55bn investment in "super-safe" mortgage securities had resulted in billions of dollars in losses.
Top officials, including Alan Greenspan, the former Federal Reserve chairman, were also blamed. The FCIC said the drive towards deregulation over the past 30 years helped to create the conditions for disaster. "What else could one expect on a highway where there were neither speed limits nor painted lines?" asks the report.
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