Angela Roman

Analysing the Financial Soundness of the Commercial Banks in Romania: An Approach based on the Camels Framework

Abstract The Romanian banking system has undergone through tremendous changes in the last decade, its financial soundness and performance being paramount in the achievement of a stable and sustainable economic growth. Thus, the aim of our research is to comparatively analyse the financial soundness of the commercial banks that operate in Romania. In order to achieve this we have used one of the most popular methods for the analysis of the financial soundness of banks, namely the CAMELS framework. The obtained results highlight the strengths and the vulnerabilities of the analysed banks, underlining the need to strengthen the concerns of the decision makers from banks to improve and increase their soundness.

The Impact of Bank-specific Factors on the Commercial Banks Liquidity: Empirical Evidence from CEE Countries☆

Abstract The recent economic and financial crisis has had a tremendous impact on the banking system, raising key questions about liquidity risk. Its management is seen to be of paramount importance, receiving great attention from policymakers, researchers and practitioners, taking into consideration that a liquidity shortage at a single so called “too big to fail” financial institution can lead to systemic contagion and instability. In this context, the aim of the paper is to analyse a significant issue that needs to be tackled when promoting financial stability, more exactly the determinants of the liquidity risk of a sample of banks operating in a series of CEE countries (Bulgaria, the Czech Republic, Hungary, Latvia, Lithuania, Poland, Romania), reviewing at the same time the progresses made in certain key areas and the remaining challenges. We considered bank specific factors over the period 2004-2011 and examined them employing an OLS regression analysis. The results of our research highlighted the negative impact that the depreciation of the loans portfolio had on the overall liquidity of the analysed banks.

The Euro Area Sovereign Debt Crisis and the Role of ECB's Monetary Policy☆

Abstract Against the background of the economic and financial crisis, public finances severely deteriorated in many EMU Member States and a new crisis, of sovereign debt, emerged. Considering ECBs recognized responsibility for ensuring overall financial stability, our paper shortly overviews the main monetary policy measures it adopted since May 2010, proving the vital roleof ECBs interventionin countering the effects of the sovereigndebt crisis. The added value of our work mainly results from the coherent analysis of the interconnections between sovereign crisis, banking crisis and the real sector of the economy, as determinants for ECBs intervention, as well as from highlighting the potential risks entailed by ECBs actions over the medium and long term.

Banks Liquidity Risk Analysis in the New European Union Member Countries: Evidence from Bulgaria and Romania☆

Abstract In a modern economy the banking institutions fulfil a double role, on the one hand they provide financial resources for investors while on the other hand they represent a trusted body for depositors. Liquidity risk may arise from the inability of a bank to provide liquidity as stipulated in the contracts, either to investors or depositors, this being extremely well underlined in the context of the recent global financial crisis. The ascension to full time members of the European Union of Bulgaria and Romania has had a tremendous effect on these countries banking systems, determining a series of changes both in the operating strategies and also in the market dynamics. Thus, the aim of our research is to evaluate the liquidity risk of the banks operating in Bulgaria and Romania in the context of the EU ascension process. In order to achieve this we have investigated the role and impact that a series of financial indicators for the capital adequacy, assets quality, management quality and profitability have on the liquidity risk of the banking institutions from our sample, the analysed period being 2003-2011. The obtained results underline that the capital adequacy ratio and the ratio of impaired loans to gross loans have a statistically significant impact on the liquidity risk of the banks operating in Bulgaria and Romania.

Interconnections between Public Indebtedness and Inflation in Contemporary Economies

This paper aims to analyze the specific interconnections established between public indebtedness and inflation, both from the perspective of considering inflation as a result of public borrowing and of voluntarily promoting inflation to reduce the (real) value of public debt and to ease its burden. It identifies the channels through which these effects are occurring, it determines the conditions of their manifestation and evaluates their relevance for different (developed and developing) contemporary economies. Although promoting irrational public borrowing may lead to inflation, such a correlation proved to be quite difficult to identify in the practice, especially for currently developed economies.

Bank Efficiency Evaluation: Evidence from a Panel of Romanian Banks

The focus of our research is on the Romanian banking sector, analysing if, over the period 2002 to 2009, foreign banks have been more efficient than their domestic peers, as foreign banks can benefit from the experience and superior know-how of their parent banks and thus achieve a superior organisation and management process. To reach this aim, we have used the Data Envelopment Analysis approach, estimating the cost, allocative, technical, pure technical and scale efficiencies; and afterwards we have conducted also a series of parametric and nonparametric tests in order to establish if foreign and domestic banks are coming from the same population. The results of the paper underline the fact that in the Romanian banking market, foreign banks are truly more efficient than the domestic ones for being able to better use their advantages and obtain a higher productivity of their inputs. Moreover, during the researched period the efficiency of the banking sector has not been improved, mainly as a consequence of the financial crisis.

What Drives the Creation of New Businesses? A Panel-Data Analysis for EU Countries

ABSTRACT Our article aims to identify the key factors that affect the establishment of new businesses in 18 developed and emerging member countries in the European Union over the period 2003–2015. Using panel-data estimation techniques, we alternatively assess the effects of some macroeconomic, demographic, individual, and business environment-related factors on the dynamics of new firm creation, proxied by the rates of nascent entrepreneurship and entrepreneurial intentions. The results show that macroeconomic and demographic variables are the most significant determinants, followed by the individual characteristics of potential entrepreneurs and of the business environment. In addition, the sovereign debt crisis in Europe in 2010 positively affected entrepreneurship through increased support for new firms by individual country governments and the European Union.

Empirical Evidence Regarding the Effects of European Integration on Banks Efficiency

The academic literature suggests that the European integration process enhances the development of the economic environment in the case of the candidate countries. The banking sector represents, especially in the case of the new EU member countries, the backbone of the economy, as it is the main channel through which the economic undertakings are financed. Thus, in this context, the aim of our research is to analyse if the ascension to EU membership and the preparation for the adoption of the European single currency, in the case of Bulgaria and Romania, the two countries that have joined the EU in 2007, have determined an enhancement of the overall estimated efficiency of their banking sectors. In order to achieve this we have employed a non-parametric analysis, namely the Data Envelopment Analysis, using one of the most comprehensive samples of banks for this type of researches. The obtained results suggest that during the analysed period of time 2003-2010, the overall estimated banking efficiency for these countries has registered a slight improvement.