The direction of the financial sector’s involvement in overcoming crisis: A case study of Romania

Abstract

In the present economic circumstances of economical-financial crisis on a world-wide level, for the Romanian
economy, the financial sector, being a key factor, have a great importance for supporting economic growth.
The aim of this paper is to analyse the finance-growth relation in Romania, using quarterly data and applying
statistical methods for a period of nine years. As such, we measure the qualitative development in the
banking sectors using the interest rate margin and the value of total credit. Due to specific characteristics of
the economic situation in Romania and other previous studies related to economic growth and credit market
development, our results provide the answer to the question of whether or not the economic growth rate is
always sustained by the financial sector development. The major findings and conclusion are that, in
Romania, a short-run increase of bank loan and interest rate margin determines a decrease of economic
growth, given by the coefficients of regression equation.