THE FINANCIAL STABILITY OF THE ROMANIAN BANKING SYSTEM IN THE EUROPEAN CONTEXT

Reforms to the European banking system aim to increase commercial banks’ ability to withstand various shocks and volatility of the current economic and social environment. Changes to European and international legislative framework aimed among other things, the level of capital adequacy and quality of loan portfolios, which are most affected by the turmoil arising in financial markets. Thus, it was considered appropriate to studying these two groups of prudential ratios, over a period of 9 financial years (2007-2015) at 8 banking systems in Europe: Austria, Czech Republic, France, Germany, Greece, Italy, Hungary and Romania. The results obtained showed that the Romanian banking system has an adequate level of capital, although the quality of loan portfolios has significantly decreased, especially in the last period of the research. National Bank of Romania’s involvement in the significant reduction of risk and sovereign debt crisis contributed to the increase of comparability of the Romanian banking market with the European market. Major problems have been reported in the Greek and Italian banking systems, largely affected by the sovereign debt crisis

The Influence of the Macroeconomical Variables on the Bankruptcy Rate of the Romanian Entities Working in the Agricultural Sector

The study’s main objective is represented by the analysis of the reasons that lead to the appearance of an agricultural companies’ default risk, based on the failure rate model developed by Wilson. In the construction of the regression model were taken into consideration the evolution of the two macroeconomic variables: the inflation rate and the variation of the exchange rate over a period of 4 years (2010-2013). The research’ results have shown that the variation of the bankruptcy rate registered by the agricultural sector is 99.99% explained by the variation of both of the macroeconomic explanatory variables

Study regarding the influence of the endogenous and exogenous factors on credit institution’s return on assets

The goal of each credit institution is represented by profitability, an objective hardly to be achieved, taking into account that banks are practicing their usual activities within a banking system that hardly tries to recover. The main purpose of this research is to identify the existence of a dependency relationship between return on assets and endogenous factors (growth rate of the loan portfolios; the rate of growth of the provisions and solvency ratio) and the exogenous ones (GDP and inflation rate). The analysis done over the horizon of the last 10 years, a period that includes both economic boom, recession and recovery, illustrated the vulnerability of the credit institution in front of the business environment. The study demonstrated a significant dependence relationship, between return on assets recorded by Carpatica Commercial Bank and the intern determinants, while the variation of the exogenous factors does not explain the variation of ROA recorded by the bank

STUDY REGARDING THE PERFORMANCE OF THE ROMANIAN BANKING SYSTEM

Bank performance is an indicator of the quality management and soundness of commercial banks. The systemic role of the commercial banks in the Romanian economy and their role of main creditor determine the supervisors to monitories their performance and their capacity to face the challenges. Taking into account that we are talking about a banking system which has not yet exceeded during turbulence generated by economic and financial crisis, the aim of this study is to identify and analyze the main determinants of bank performance, so any shocks that may impact on this indicator to be identified early and minimized. The financial authorities, in their attempt to avoid new bank failures, because of their negative impact on the entire financial system, have imposed new capital requirements in order to strengthen the banking system’ capacity to absorb shocks. The most used indicators in order to measure the performance of the banking system are return on assets and return on equity. Taking into accounts this consideration the main objective of this study is to analyze the determinants that have a major impact on the banking system performance in an empirical and theoretical manner. To achieve this goal we used a quantitative method, the Pearson’s coefficient. Into the model were involved datas recorded by Romanian banking system in the period 2008-2013, processed by the publications of National Bank, the International Monetary Fund and the National Institute of Statistics. In the model of the correlation coefficient, the regression involved the following indicators: solvency, nonperforming loans as a percentage of total loans, gross domestic product and inflation. The results demonstrated that the factor that have the greatest impact on banking performance is the solvency ratio, followed by the nonperforming loans, the inflation rate and by the gross domestic product. So it can be observe that internal determinants have a biggest impact on the performance than the external one