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The Resilience Of The Banking System Of The Republic Of Moldova During Crisis Periods: Evidence From The Last 10 Years

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  • Ion VEVERIȚĂ
  • Ion PÂRȚACHI

Abstract

As a developing country with an open economy, the Republic of Moldova is highly dependent on the import of energy resources and sensitive to the exchange rates fluctuations, the resilience of the banking system is crucial for maintaining and development of the financial intermediation (deposits taking and loans providing). This is because reliable and stable intermediation services are provided for clients from one side and help to implement the investment programs that are supported by international financial organizations and the local government from the other side. As a robust economy requires a comprehensive and coherent legal environment, authorities implemented regulatory frameworks that build more stability and predictability and diminish the potential negative impact of crises that can affect the financial system and as a result of client trust in the robustness of banks. Quantitative analysis performed on freely available data sources stated the resultative effect on shocks impact, but did not take into consideration the corrective impact of the actions that the government activated during the extreme economic condition environment. Although the direct limitation of the profit distribution from the supervisory authority is not appreciated by the market players and their shareholders, there are reasons that preserve resilience at a controlled and sustainable level, the attractivity of the banking sector for investors on increasing/maintaining the investments or entering the market remains valid. As a next step, development of a high-frequency early warning indicator enhances the ability to detect operational disturbances within the banking system.

Suggested Citation

  • Ion VEVERIȚĂ & Ion PÂRȚACHI, 2025. "The Resilience Of The Banking System Of The Republic Of Moldova During Crisis Periods: Evidence From The Last 10 Years," Eastern European Journal for Regional Studies (EEJRS), Center for Studies in European Integration (CSEI), Academy of Economic Studies of Moldova (ASEM), vol. 11(1), pages 99-106, June.
    • Handle: RePEc:aem:journl:v:11:y:2025:i:1:p:99-106
    DOI: https://doi.org/10.53486/2537-6179.11-1.07
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    References listed on IDEAS

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    1. Feyen,Erik H.B. & Mare,Davide Salvatore, 2021. "Measuring Systemic Banking Resilience : A Simple Reverse Stress Testing Approach," Policy Research Working Paper Series 9864, The World Bank.
    2. Asli Demirgüç-Kunt & Enrica Detragiache, 1998. "The Determinants of Banking Crises in Developing and Developed Countries," IMF Staff Papers, Palgrave Macmillan, vol. 45(1), pages 81-109, March.
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    Keywords

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    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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