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Strengthening the Romanian Banking System Effects of Joining the Banking Union

Mariana Paja
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Mariana Paja: Faculty of Economics, Ecological University of Bucharest

No 7, Economics of Sustainable Development.The Economic Impact of Climate Change. - Working papers from Ecological University of Bucharest, Department of Economics

Abstract: Romanian banking system has demonstrated its structural stability by optimizing loan portfolios through an extensive cleaning of balance sheets and to grant credits. The dynamics of the Romanian banking sector proves its strength in the post-crisis, in the various external and internal shocks, some with significant magnitude. Having on the background the pro-active measures taken by the National Bank of Romania, the soundness of the banking systemhas strengthened, concretizedin additional capital contributions, a rigorous provisioning of loans in difficulty solvency; the ratein the banking system has strengthened. Currently the main problem of the banking system covers the deleveraging amid a downward trend of resources attracted from parent banks. All developments in the banking system occur in the context in which at international and European level, is a reconfiguration of regulation and supervision mode, and at the principles underlying them - all as also a result of the international financial crisis. Mugur Isarescu, the BNR governor, presented at The Economist Conference "The EU-Southeast Europe Summit - On the road to stability and growth" organized in Bucharest, six arguments for a country like Romania to join the Union Banking: the prevalence capital in the Eurozone - is above 70% of the net assets of the banking system and of the Romanian capital - Eurozone banks; the participation from the inside at the mechanism construction - first-hand knowledge; removing an incentive for disintermediation from foreign banks - reduction of around 35% external funding from parent banks (2013 - half the reduction); the elimination of jurisdictional arbitrage; considerable costs generated from non-participation; vulnerability to contagion effects.

Keywords: banking system; banking supervision; financial intermediation; banking union (search for similar items in EconPapers)
JEL-codes: E58 F36 G01 G21 (search for similar items in EconPapers)
Pages: 8 pages
Date: 2015-11
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Published in Economics of Sustainable Development - Economics of Sustainable Development.The Economic Impact of Climate Change., ISBN: 978-606-652-100-0, June 2016, pages 57-64

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