Recent global developments have created multidimensional and diverse pressures on countries' economies. The economic, financial, and social impact level differs from country to country. However, the globalization framework of economic relations allowed a much more intense expansion of the capacity to propagate the effects of risks. In this sense, events such as the crisis generated by the COVID-19 pandemic, the outbreak and continuation of the war in Ukraine and other geopolitical imbalances, the recent turmoil in the banking system, the energy crisis, the rapid developments in the field of digitization (digital transition), and last but not least, the concerns of reducing the negative effects of human activity on the environment (green transition). All of these are major factors that require a systemic and common (concerted) approach of national and international institutions, with the role of regulation, supervision, and recovery of the economic-social context.
Top1. Background
The main objectives that we propose to develop within this chapter refer to:
The monetary policy of the NBR in the current context
The role of the BNR in ensuring financial stability and the decisions taken in the context of multiple crises
Authorization and regulation and prudential supervision of financial institutions in Romania
Bank resolution
Issuance of cash as an exclusive activity of the NBR
NBR and EBRD
The monetary policy of the NBR aims to ensure price stability in the Romanian economy framework, marked by predictable or less predictable events, contributing also to sustainable economic growth. According to the regulations in force, the main instruments of monetary policy are represented by money market operations, the facilities granted to credit institutions, and the establishment of minimum reserves. Thus, monetary market operations (open market) are the most important instrument of monetary policy belonging to the NBR. The role of these operations is both the guidance of interest rates, the management of liquidity conditions, and the orientation of Romania's monetary policy.
NBR monetary policy considers the strategy of direct inflation targeting (adopted by the NBR in August 2005), with a stationary target of 2.5% ±1% (starting from December 2013) (NBR, Annual report, 2022, p 73). In this sense, the most recent decisions, in the context of the implications of the energy crisis, the war in Ukraine, etc., had in mind the stimulation of savings and the reduction of the annual inflation rate.
Romania's inflation rates are presented in the figure below. It can be observed that during 2022, the inflation rate grew rapidly well above the inflation target, under the effect of the global shocks (the supply-side factors, the Ukrainian war, and the related penalties that affected the energy prices. These conditions required prompt and corroborated interventions of NBR and the Government to control the potential exacerbations of negative effects (Hatmanu et al., 2014; Lobont et al., 2018; Moldovan et al., 2014; Vatavu et al., 2022).
Figure 1. (NBR, Statistics Banca Naţională a României - Inflation Reports (bnr.ro)) Recent years challenged the economic normal parameters with the presence of various negative factors, such as the Covid-19 pandemic (Marcuta et al., 2022), the Ukrainian war, the environmental challenges (Abban et al., 2023; Ayad et al., 2023; Cigu et al., 2020; Jiang et al., 2023; Nuta et al., 2015; Nuta, et al., 2023; Tiwari et al., 2023) and technological pressure (Nureen et al., 2023). These phenomena requested structural and non-structural interventions.