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The difference between lending interest rate and funds interest rate. Link with sustainable banking. Particularities of Romanian Market

Author

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  • Cristian Gheorghe Iacob

    (Romanian Academy, National Institute for Economic Research “Costin C. Kiritescu”, Bucharest, Romania)

Abstract

The article, is trying to capture the way difference between active and passive interest rates influence macroeconomic sustainable development in a country. However the theory is limited on this area and the author is intending to merge practical aspects with conceptual terms. The role of banks in an economy is very important, as all inflows and outflows are done through financial institutions. Bank sustainability is the area of study and practice that captures the contribution of banks in sustainable development of a country. Banking instruments are the means by which banks are present and act in the economy. Banking techniques are the mechanisms of banking instruments. The most important banking instruments are the loans and the deposits. So banks take deposits from different entities and use them as resource to finance other entities. A bank is considered contributing to sustainable development, if lending divisions allocates resources to investments that bring long-term welfare to the community not only for today people, but for future generations. Therefore, we can establish a correlation between banking sustainability and sustainable development through the evolution of banking instruments. Looking to detail, bank sustainability is highly affected by the local macroeconomic issues, but also from global influences.

Suggested Citation

  • Cristian Gheorghe Iacob, 2015. "The difference between lending interest rate and funds interest rate. Link with sustainable banking. Particularities of Romanian Market," Manager Journal, Faculty of Business and Administration, University of Bucharest, vol. 21(1), pages 60-67, May.
    • Handle: RePEc:but:manage:v:21:y:2015:i:1:p:60-67
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