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Efficiency And Competition In Romanian Banking System: Empirical Evidences


  • Teodora Cristina Barbu

    (Bucharest Academy of Economic Studies)

  • Iustina Alina Boitan

    (Bucharest Academy of Economic Studies)

  • Bogdan Andrei Dumitrescu

    (Bucharest Academy of Economic Studies)


Our paper aims to provide a response to a challenge, namely quantifying the efficiency and competition in the Romanian banking system, as we have noted the absence of baseline studies on this topic. Correlated with bank profitability, the two concepts provide a full picture of the bank and answer to the questions: Why, how and where a bank is positioned in the banking system? We believe that our contribution brings back to the center of the theoretical approaches the two coordinates of banking activity, and from the perspective of professionals, we offer them more subtle information about inputs and outputs in banking and the bank's market power, degree of competition and efficiency, in terms of cost or profit. Thus, we have empirically examined the degree of competition and cost-efficiency achieved by the Romanian systemically important banks, because we considered that a high level of efficiency in the banking business, amid a competitive environment, significantly influences the performance and financial soundness of the entire banking system.

Suggested Citation

  • Teodora Cristina Barbu & Iustina Alina Boitan & Bogdan Andrei Dumitrescu, 2011. "Efficiency And Competition In Romanian Banking System: Empirical Evidences," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 5(5(558)(su), pages 731-740, July.
  • Handle: RePEc:agr:journl:v:5(558)(supplement):y:2011:i:5(558)(supplement):p:731-740

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    References listed on IDEAS

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    4. Isard,Peter, 1995. "Exchange Rate Economics," Cambridge Books, Cambridge University Press, number 9780521460477, March.
    5. Carmen M. Reinhart & Vincent Raymond Reinhart, 2002. "What Hurts Emerging Markets Most? G3 Exchange Rate or Interest Rate Volatility?," NBER Chapters,in: Preventing Currency Crises in Emerging Markets, pages 133-170 National Bureau of Economic Research, Inc.
    6. Ronald MacDonald, 1997. "What Determines Real Exchange Rates? The Long and Short of it," IMF Working Papers 97/21, International Monetary Fund.
    7. Edison, Hali J. & Pauls, B. Dianne, 1993. "A re-assessment of the relationship between real exchange rates and real interest rates: 1974-1990," Journal of Monetary Economics, Elsevier, vol. 31(2), pages 165-187, April.
    8. Meese, Richard A & Rogoff, Kenneth, 1988. " Was It Real? The Exchange Rate-Interest Differential Relation over the Modern Floating-Rate Period," Journal of Finance, American Finance Association, vol. 43(4), pages 933-948, September.
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