Regular Banking System versus Shadow Banking System. A Comparative Assessment of Evidence from Romania

Authors

  • Claudia Gabriela Baicu Spiru Haret University

DOI:

https://doi.org/10.26458/jedep.v8i4.650

Keywords:

regular banking system, shadow banking system, Romanian financial system, global financial crisis

Abstract

This study is determined by several factors that includes: (1) increasing interest in the shadow banking system as a result of the consequences of the global financial crisis; (2) the links between the traditional banking system and the shadow banking system with regard to the impact on financial stability; (3) low interest rates on bank deposits in recent years that might drive the development of the shadow banking system and (4) the lack of extensive literature on similar studies regarding Romania. The period analyzed is 2008-2018, beginning with the year when the effects of the global financial crisis were felt in Romania and the macroeconomic conditions deteriorated. The results reveal that the shadow banking in Romania is small compared to the regular banking system that dominates the Romanian financial system. The European Union financial sector greatly impacts both the banking sector and the shadow banking system. The entities and the activities composing the shadow banking system are not complex and the links between the two financial sectors raise greater risks to shadow banking entities than to regular banks.   

Author Biography

Claudia Gabriela Baicu, Spiru Haret University

Baicu Claudia Gabriela is currently an associate professor at the Spiru Haret University, Faculty of Economics Bucharest. She is graduated from Faculty of Commerce at the Academy of Economic Studies in Bucharest. She took her PhD in Finance with the thesis entitled “Banks and international banking activity” and later attended a post-doctoral program at the Romanian Academy, finalized with a research titled “The crisis and the regulation of financial and banking activity”.

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Published

2019-10-01

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Section

Articles