El uso de la fuerza mortal Ejercicio: Ley de Seguridad Aérea

IMOLA DRIGĂ ^*

ABSTRACT: The efficiency of the banking system and financial markets represents a determinant factor for sustainable development. Thus, banks are essential for any modern economy, not only because of their turnovers but also because they provide a number of important functions for the national economy, being the main financier.

KEY WORDS: the banking system, the role of banks in economy, the banking degree of the economy

In modern sense, banks appeared and consolidated in close connection with the development of commerce and capital accumulation, being a direct consequence of production development and expansion of the entire economy. Playing a significant role in the development of trade, these banks were named commercial banks. In the process of commercial banks’ emergence money changers and money lenders played a peculiar role, being the first monetary intermediaries, carrying out trade with money.

Later on, as the economy developed and the volume and structure of exchanges amplified, the place of money changers and money lenders was taken by banks which took over funds from capital holders in order to keep them safely and remunerate their owners with interest. Banks were forming deposits used to provide loans for those in need of capital. In this way, bank deposits were the base of the capital redistribution process as lending sources. Today, the role and place of banks in the economy are closely connected with their attribute of main financial intermediaries in the relation savings-investments.

Market economy requires a strong banking system that enables funds redistribution. Nowadays, banking is referred to as a service industry rather than a profession. Therefore, a bank can be associated with a financial service conglomerate able to provide basic financial services and properly function within the economic,

* Lecturer at the University of Petroşani, Romania

political, legal and international environment that determines its profit and expansion opportunities, interest rates, exchange rates and the particular resources a bank needs.

Commercial banks are considered however not only as business organizations, but also as public institutions with a well-determined role in the economic and social field.

On short, commercial banks are profit-making organizations acting as intermediaries between borrowers and lenders attracting temporarily available resources from business and individual customers as well as granting loans for those in need of financial support. From this point of view, banks deal with money belonging to persons and other firms. Its inputs are represented by money in the form of deposits for which banks pay a certain amount as interest while its output is mostly formed by loans granted to credit applicants for which the lender is entitled to charge interest. If these activities are successful, the income of the bank is greater than its expenses and the bank earns a profit achieving its primary goal.

The efficiency of the banking system and financial markets represents a determinant factor for sustainable development. Thus, banks are essential for any modern economy, not only because of their turnovers but also because they provide a number of important functions for the national economy, being the main financier.

In order to perform their functions, commercial banks provide a tempting array of financial services to attract customers and to meet their demands.

Being at the same time borrowing and landing institutions, banks also offer other types of services, such as: payments, settlements and funds transfer, foreign exchange transactions, savings and investment services, payroll services, financial advice, investments and bill finance, safe-deposit boxes. So as to provide these financial services, commercial banks perform certain functions within the national economy:

- the function of deposit’ acceptance, attracting temporarily available resources from business and individual customers;

- the investment function, granting loans for those in need of financial support;

- the commercial function that enables fund transfer between account holders determined by various activities.

The banking system, seen as a mirror of economic growth, can contribute to the economic development of the country in at least two ways: directly, through the increase of balance sheet elements and indirectly through financial services granted for clients.

By analyzing the information provided by the aggregate monetary balance sheet of banking institutions, one can observe a continuous increasing trend during the entire period 2000-2005, so that the level reached in 2005 (in amount of 130259788 thousand RON) exceed 5.6 times the level reached in 2000. With respect to banking assets, such a development is based on the increase of internal assets which were 1.13 times higher in 2005 in comparison with the end of 2000. As far as external liabilities are concerned, the growth was 20.66 regarding the same period of time (Table 1 and Figure 1).

The Role of the Banking System in the … 57 Table 1. The evolution of bank assets and liabilities in Romania during 2000-2005

Indexes with chain base

Assets Liabilities Specification

Year

Total External Internal Total External Internal 2001/2000 1,51 1,27 1,56 1,51 1,59 1,51 2002/2001 1,36 0,78 1,46 1,36 1,61 1,34 2003/2002 1,29 0,88 1,33 1,29 2,15 1,23 2004/2003 1,48 1,49 1,48 1,48 2,00 1,41 2005/2004 1,43 0,86 1,46 1,43 1,88 1,34

Indexes with fixed base

Assets Liabilities Specification

Year

Total External Internal Total External Internal 2001/2000 1,51 1,27 1,56 1,51 1,59 1,51 2002/2000 2,06 0,99 2,28 2,06 2,55 2,03 2003/2000 2,65 0,88 3,02 2,65 5,48 2,48 2004/2000 3,93 1,31 4,47 3,93 10,98 3,50 2005/2000 5,60 1,13 6,53 5,60 20,66 4,69

0 20000000 40000000 60000000 80000000 100000000 120000000 140000000 thousand RON

External assets

Internal assets

External liabilities

Internal liabilities

2000 2001 2002 2003 2004 2005

Figure 1. The evolution of bank assets and liabilities in Romania during 2000-2005

One of the most important financial services offered by commercial banks is providing loans to both individual clients and companies. Lending to individuals and firms is a vital banking function because commercial banks earn profit mostly from charged investment rates.

Generally, credit is defined as an immediate purchasing power exchanged for the promise of repaying it at a later date, paying interest for its use and protecting the pledged collateral until the loan is paid in full. A credit transaction is a business activity that involves two sides: a borrower, which generally is an individual or a firm and a lender that may be a lending institution such as a commercial bank or other intermediary involved in the purchase.

Credits are the main assets for a bank having a particular importance within the financing process of the entire economy. In order to analyze the current position of bank loans and the perspectives of the Romanian banking system, we must pursue the evolution of the banking degree of the economy, estimated both as the proportion between bank assets and GDP and as the proportion between loans and GDP (Table 2 and Figure 2).

Table 2. The evolution of the proportion between bank assets and GDP and of the proportion between loans and GDP in Romania during 2000-2004

Bank assets Bank loans

Year GDP (thousand

RON) Total

(thousand RON)

%

in GDP Total

(thousand RON) %

in GDP % in assets

2000 80.377.310 23.267.362 28,95 7.500.711 9,33 32,24 2001 116.768.700 35.214.642 30,16 11.825.443 10,13 33,58 2002 151.475.090 47.819.213 31,57 17.872.797 11,80 37,38 2003 190.335.390 61.736.703 32,44 30.287.938 15,91 49,06 2004 238.791.430 91.384.458 38,27 41.762.355 17,49 45,70

During 2000-2004, the analyzed data show an increasing trend for both the proportion between bank assets and GDP and the proportion between loans and GDP, banking loans representing 49% from GDP at the end of 2004. However, by comparison with other countries, the banking degree of the Romanian economy is still low (in the Czech Republic and in Hungary it represents over 100%, in Switzerland 300% and in Great Britain 270%).

At the same time as banking products and services developed, as a consequence of increasing competition in this area and of extensions of the private sector, one of the main challenges for Romanian banks became lending profitable loans

The Role of the Banking System in the … 59 by maintaining risks at a reduced level. In this regard, the tendency in the lending side of banking is to increase loans granted to individuals.

0 10 20 30 40

%

The proportion between bank assets and GDP

The proportion between loans and GDP

2000 2001 2002 2003 2004

Figure 2. The evolution of the proportion between bank assets and GDP and of the proportion between loans and GDP in Romania during 2000-2004

Thus, in 2003, as inflation diminished, determining a decreasing trend for interest, loans became more approachable for individuals and as a consequences bank credits reached a level of 30287938 thousand RON, representing 15.91% in GDP, retail credits being in amount of 7501202 thousand RON, representing 24.76% from total credit granted by the banking system. In 2004, as a result of implementing a new regulation issued by the National Bank of Romania concerning credit risk limitation for consumer loans, the volume of retail credits decreased consequently.

At present, the role and place of the banking system in the economy are closely connected with their attribute of main financial intermediaries in the relation savings-investments that has a determining importance in economic growth. At the same time, banks play the role of monetary intermediaries having as basic characteristic the capacity of transforming non-monetary assets into money, simultaneously representing the main transferring channel in implementing the monetary policy of the central bank.

In terms of global economy, the increasing role of the banking system in the economy is obvious taking into consideration the fact that, as informatics and communicational systems are developing, we can assist at the arise of a financial network system world-wide composed of regional and national banking systems.

REFERENCES:

[1]. Basno, C. (coord.) - Monedă, credit, bănci, Editura Didactică şi Pedagogică, Bucureşti, 2001

[2]. Hoanţă, N. - Bani şi bănci, Editura Economică, Bucureşti, 2001

[3]. Ionescu, L.C. - Economia şi rolul băncilor, Editura Economică, Bucureşti, 1997 [4]. Larosiere, J. - Financial Transition in Europe and Central Asia, The World Bank, Washington, 2001

[5]. Rotaru, C. - Sistemul bancar românesc şi integrarea europeană, Editura Expert, Bucureşti, 2000

[6]. B.N.R. - Rapoarte anuale, Buletine lunare ş trimestriale, 2000-2006

[7]. *** - Legea nr.58/1998 privind activitatea bancară, republicată în M.Of. nr.78/24.01.2005

Annals of the University of Petroşani, Economics, 6 (2006), 61-64 61

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