 THE IMPACT OF FINANCIAL LIBERALIZATION ON ROMANIAN BANKING SYSTEM EFFICIENCYMaria Ciupac-Ulici and
Beju Daniela-Georgeta ()
Annals of Faculty of Economics, 2013, vol. 1, issue 1, 1070-1077 Abstract: In the last three decades, many emerging countries have moved away from a system of restrictive monetary and financial controls to a more liberalized financial sector. The restrictive imposed policies were expected to contribute to industrialization of the economy and to the stability of the banking sector. However, financial liberalization had big costs on the banking system's competitiveness and efficiency. Financial liberalization has a different impact on banking markets. Thus, there is no size that fits all policies concerning banking liberalization process. For highly efficient banks, competition is improving their efficiency standard, while less efficient banks can`t compete with foreign banks and further are decreasing in efficiency or are driven out of the market. Overall, the average efficiency of domestic banking markets should be an important variable in deciding to open up their banking market. Banks that are operating close to the frontier, in general are improving their efficiency following financial liberalization process. Banks that are operating in a further distance can`t manage to compete with foreign market entrants, so, they are losing from liberalization process. In this article we propose to measure the impact of financial liberalization process on Romanian banking system. We used the panel regression to study the informational efficiency of three Romanian banks during 2004 - 2012. The dependent variable of the model was the price of stock bank, and the independent variables were the financial indicators (return on equity, return on assets, net profit margin). In the second regression we introduce a dummy variable for crisis period. Our results show that the financial indicators choose do not affect the efficiency of Romanian bank, but the crisis had a negative impact on them. International context, credit risk, the implementation of Basel III and reducing exposures in the absence of investment alternatives remains key challenges to the Romanian banking system in future. Keywords: financial liberalization; bank; return on equity; return on assets; net profit margin (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ora:journl:v:1:y:2013:i:1:p:1070-1077 Access Statistics for this article More articles in Annals of Faculty of Economics from University of Oradea, Faculty of Economics Contact information at EDIRC. |
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