Implications on the Profitability of Banking Activity in the Context of the Current Global Financial Crisis

Bogdan Florin Filip ()
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Bogdan Florin Filip: Alexandru Ioan Cuza University of Iaºi, Faculty of Economics and Business Administration

The Journal of Accounting and Management, 2014, issue 3, 21-25

Abstract: In this paper, the author outlines synthetically, first, landmarks of the manifestation of the global financial crisis effects with implications on the profitability of commercial banks, highlighting causal linkages which determine the return on assets (ROA) of the commercial banks. In this context it is deepened the research also in terms of the dynamics expressed by the evolution of banks’ ROA and of the correlations of the respective rate with some macro indicators (the changes in EUR/RON exchange rate, the unemployment rate, GDP variation etc.), by adapting and using an econometric model in which the changes in ROA is the dependent variable while the other indicators are determinant variables. The results obtained by processing the data corresponding to the variables included in this econometric model, including the change in nonperforming loans volume, within the analysis aiming the situation in Romania in the period 2008-2013, basically highlight negative implications of the mutations occurring on the background of the current financial crisis manifestation, reflected in reducing the profitability of the banking activity.

Keywords: ROA; GDP; exchange rate; inflation rate; NPLs (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:dug:jaccma:y:2014:i:3:p:21-25

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