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Banking in Romania during and after socialism
Văduva Alina-Maria, Ph. D Student University of Craiova Faculty of Economics and Business Administration Craiova, Romania alinavaduva@gmail.com 0040/747507677
Abstract The main objective of this study is to provide an overview of Romanian Banking Market during socialism, in the period of transition until the integration in the European Union and the period after the integration in the EU until nowadays. The study shows the transformation and main reforms in the Romanian banking industry in the last sixty years. To achieve this objective, it has been conceived a comparative study of banking in Romania using available literature, critical analysis and professional experience of the author. The originality and value of the article comes from the analysis of the evolution of Romanian banking and of both positive and negative implications of attracting foreign capital in banking. Key words: evolution, reforms, centralized banking, foreign capital in banking, financial crisis. Introduction Banks play many important roles in the financial system. The efficiency of the process through which savings are channeled into productive activities is crucial for growth and general welfare. Banks are an important part in this process. Banking activity in Romania has always been under the influence of foreign banks. This fact had a positive effect in developing Romanian banking, but there were also periods when it had negative implications such as the facilitation of leakage of the country’s financial resources, the deterioration of financial stability due to exists of foreign banks from Romanian banking market, bankruptcies or contagion effect. (Căpraru B., 2011). Until World War II, there was a competence for supremacy between Romanian and foreign capital, while during crisis time the foreign capital was more involved in the development of the economy. During socialist era, there were foreign banks that opened branches in Romania,
Văduva Alina-Maria, Ph. D Student University of Craiova Faculty of Economics and Business Administration Craiova, Romania alinavaduva@gmail.com 0040/747507677
Abstract The main objective of this study is to provide an overview of Romanian Banking Market during socialism, in the period of transition until the integration in the European Union and the period after the integration in the EU until nowadays. The study shows the transformation and main reforms in the Romanian banking industry in the last sixty years. To achieve this objective, it has been conceived a comparative study of banking in Romania using available literature, critical analysis and professional experience of the author. The originality and value of the article comes from the analysis of the evolution of Romanian banking and of both positive and negative implications of attracting foreign capital in banking. Key words: evolution, reforms, centralized banking, foreign capital in banking, financial crisis. Introduction Banks play many important roles in the financial system. The efficiency of the process through which savings are channeled into productive activities is crucial for growth and general welfare. Banks are an important part in this process. Banking activity in Romania has always been under the influence of foreign banks. This fact had a positive effect in developing Romanian banking, but there were also periods when it had negative implications such as the facilitation of leakage of the country’s financial resources, the deterioration of financial stability due to exists of foreign banks from Romanian banking market, bankruptcies or contagion effect. (Căpraru B., 2011). Until World War II, there was a competence for supremacy between Romanian and foreign capital, while during crisis time the foreign capital was more involved in the development of the economy. During socialist era, there were foreign banks that opened branches in Romania,
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