BUCHAREST (Reuters) - If it wasn't for the sharp drop of Romania's currency in September on the back of world financial troubles, Bogdan Voinea would be driving a new car now.
"When I open the newspaper in the morning, I don't read politics any more, I go straight to the exchange rate page, hoping for good news. I need a car," said Voinea, a 39-year-old architect who lives in Bucharest.
Like many Romanians who are seeking a better life after decades of shortages under communism and botched reforms after the country's 1989 revolution, Voinea has been borrowing heavily.
He hopes global credit jitters will subside soon, allowing the leu currency to rise and making low-interest loans in euros affordable for him again.
But economists warn Voinea and thousands of other Romanians, who are eagerly sinking into debt, to learn a lesson from the turbulent summer and step away from banks' lending counters.
Without some slowdown in rampant consumer lending, particularly loans in hard currencies, the emerging economy faces a serious risk of overheating that could destabilize its financial system and erode the economic gains of the post-communist era.
"It's a good thing the financial shock in the U.S. happened now. It opened many people's eyes," said central bank Chief Economist Valentin Lazea.
Standard & Poors rating agency said recently that Romania, with its rampant domestic borrowing, is among countries in Europe, Middle East and Africa which are most at risk of a negative fallout from tighter global credit conditions.
With Romania's high level of demand, global financial woes could hit the leu hard, making it hard for thousands of borrowers to pay back their debt. This could send damaging shockwaves through the economy, boosting inflation and slowing growth.
Borrowers see euro zone accession, expected in 2014, as an escape, but the central bank still warns about risks of currency volatility in the meantime.
Romanians have grown confident in recent years as economic reforms and foreign investment began to bear fruit, and consumption has taken off sharply.
"I would indebt myself to the maximum. If you save money, you'll never have the things you want," said Bogdan Parvulescu, a 29-year-old economist at the insurance arm of a Romanian bank in Bucharest.
He has euro-denominated mortgage debt and a local currency loan to finance his car. A third of his salary goes to the bank, conservative by Romanian standards, where a ratio of up to 65 percent is acceptable.
Thousands of Romanians have taken advantage of real wage increases of about 20 percent in the last two years, replacing their old, boxy Dacia cars with new imported models that bring traffic in large cities to a standstill most days.
Demand for new housing has powered a real estate boom that records some of the fastest rates of price growth in Europe.
In Bucharest, young people joining the real estate ladder are willing to pay as much as 2,000 euros ($2,841) per square meter of a "matchbox" apartment in drab and overcrowded housing built during the communist era.
Those who thought in March that 40,000 euros for a 30-square-metre apartment on the outskirts of Bucharest's was too much, now are struggling to find one for 60,000 euros.
Banks are making sure the temptation to borrow is high.
Offers for cheap and fast loans are part of almost every commercial break during popular television shows. Young people with handfuls of bank pamphlets dot major city streets, and tellers are cold-calling potential customers.
Debt levels are rising fast and catching up with western levels, where customers and banks are likely to be more prudent about their debt.
Compared with income levels, household debt was already comparable with countries in the euro zone in 2006. Compared to GDP, it stood at 12 percent in 2006, up from 8 percent a year before, but far below euro zone levels of more than 50 percent.
The leu's fast rise in recent years has also fanned interest in foreign currency borrowing, which offers lower interest rates. The Romanian currency has risen 25 percent against the euro in the last three years, before turning weaker this summer.
Central bank data also show non-government lending in hard currency was 61 percent higher on the year in August, compared with 24 percent a year before. Lending growth in lei slowed down to 41 percent, from 106 percent in August 2006.
Hard currency loans for households doubled on the year in August, the latest figures available show.
Banks say they have been modernizing procedures to cut red tape. But corruption, fraud and inefficient administration are still rampant, raising the risk of bad loans or excessive exposure for lenders and borrowers.
Housing evaluators often take bribes to give a higher value to a property, allowing borrowers to take out more cash. Some borrowers hide loans taken out elsewhere to appear more creditworthy.
"When loans are extended at this rate, with credit growth of 40 to 50 percent a year, it's difficult to do due diligence," said the IMF's regional senior representative, Christoph Rosenberg.
"There is anecdotal evidence of people cheating with their pay slips -- all the things we also saw in the (U.S.) subprime crisis."(Additional reporting by Iulia Rosca in Bucharest and Boris Groendahl in Vienna)