IS ROMANIA OVERBANKED?

PETRIA Nicolae, Lucian Blaga University of Sibiu

Abstract:
During some debates within the Romanian financial environment, it is often stated that in Romania are too many banks when compared with the level of economy development and the gross domestic product. Taking this into consideration, we intend in the present article to answer the question: Is Romania overbanked? In order to answer this question we performed a comparative analysis of the Romanian banking system. We analyzed development of the Romanian banking sector and put it against the banking sectors from EU, USA and Japan. The analysis was done taking into consideration several relevant indicators: bank assets/GDP, loans/GDP, the level of bank concentration, the financial structure of the economy. We also benchmarked the liabilities share in GDP and the leverage. With the objective of determining if the Romanian banking system is oversized in relation with the real needs of the Romanian economy we analyzed the share of loans in total bank assets and in GDP. We compared the results with the values recorded in the EU banks and we drew the conclusions accordingly. Our comparative analysis led us to the conclusion that the Romanian banking system is still underdeveloped and is below the needs of the Romanian economy. Romania needs the development of its banking sector but it is also required the specialization of some of its universal banks. There are to few specialized banks and too many universal banks. 

Keywords: banking system, banking asset, loan

JEL Classification: G20

Volume: 69, Issue: 6

Pages: 63 - 74

Publication date: December, 2017

Download the article: http://economice.ulbsibiu.ro/revista.economica/archive/69607petria.pdf

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