Field: Finances and financial capital

Subfield: Financial capital

Details:

Capital accumulation is directly facilitated by financial-banking institutions. The banks’ capitalization rate is essential for the credibility of the banking system and for the banks’ capacity to resist crises in the system. The higher the banks’ capitalization rate, the more responsible they are in lending and the lower the moral hazard. The capitalization rate shows the banks’ trust in an economic system and their openness towards sharing risk with economic agents. The capitalization rate is the ratio of banks’ own capital to assets (the banks’ overall financial obligations). This indicator shows Romania is slightly above EU average (8.51% in 2016) and Eurozone average (8.45% in 2016), with a capitalization rate of 8.56%. However, in the region, Romania is second only to the Czech Republic, the rest of the countries (Bulgaria, Poland, Slovakia, Hungary) having a higher capitalization rate than Romania.