THE IMPACT OF THE GLOBAL FINANICIAL CRISIS ON THE ROMANIAN BANKING INDUSTRY

The 2008 Global Financial Crisis significantly disrupted the international banking system, exposing vulnerabilities related to excessive risk-taking, inadequate regulation, and insufficient capital reserves. Although Romania's banking sector had limited direct exposure to toxic assets, it was deeply affected by spillover effects from Western financial markets. The crisis highlighted the fragility of foreign-funded credit expansion in Romania, which led to rising non-performing loans (NPLs), regulatory overhauls, and increased provisioning. In response, the National Bank of Romania implemented stricter loan-to-value requirements, enhanced supervision of non-bank financial institutions, and promoted domestic savings. Capital buffers were introduced following European guidelines, and banks shifted their focus toward government securities and portfolio restructuring. Interest rates on RON-denominated loans and deposits declined, reflecting monetary easing aimed at supporting lending in local currency. Over time, key indicators such as solvency ratios and domestic savings improved, reflecting the sector's gradual recovery and resilience. The paper offers a comprehensive analysis of the Romanian banking sector's transformation in the aftermath of the crisis and underscores the structural changes that fortified its stability against future shocks.