THE SHADOW BANKING SECTOR IN ROMANIA

The discussions and studies around the 'shadow banking' topic have increased considerably in recent years, especially soon after the start of the most recent financial crisis. Current developments reveal that institutions belonging to the shadow banking sector are becoming more active. Moreover, the share of their assets in the GDP is increasing against a readjustment and some tightening in the traditional banking sector. There is strong evidence that this sector has grown in size and complexity in the last decade, either due to migration of some banking activities into the 'shadows' or the establishment of new non-bank operations (fostered by a low interest rate macroeconomic environment). Romania is not an exception from the EU and the global trend although, in its case, as the paper highlights, the shadow banking sector is small and simple. The current paper aims to unpack the 'shadow banking' concept and to provide a fresh perspective - mostly quantitative - into the level of development of this sector in Romania, since its earliest stages.