ROBOR - a 'Thumbscrew' of the Romanian Financial System?

• Author: Viorica Puscaciu, Rose-Marie Puscaciu
• Position: Professor, PhD, Danubius University of Galati, Department of Economics, Romania/Senior Lecturer, PhD, Danubius University of Galati, Department of Economics, Galati, Romania
• Pages: 294-303

European Integration - Realities and Perspectives. Proceedings 2019

294

ROBOR - a “Thumbscrew” of the Romanian Financial System?

Viorica Pușcaciu1, Rose-Marie Pușcaciu2

Motto:

“Inflation decreases when I decide.”

(The Savior of the Dune, Frank Herbert)

Abstract: Although present in the banking business for several years, ROBOR has recently become a much

discussed and disputed problem in the Romanian economic life. Even if - just recently, after many disputes, it

was replaced, we try to clear the situation. What is and what is the use of this banking tool that influences

financial activity and influences the lives of many of us? This paper intends to clarify – at least partly – the

importance and the main aspects of this banking instruments that lately became a true, “thumbscrew” for the

Romanian financial system. Thus, this research is meant to be an essayistic approach of this controversial

matter, which has much influenced the economic and social scene in our country. The study refers to the

functioning mechanism ROBID-ROBOR, to the reasons of which the interest rates are related to ROBOR, and

tries to answer to the question like - what are the factors that influence the evolution of ROBOR, and how this

bank index influences bank r ates. Our study is addressing both to specialists, and also to the students and

researchers which might be interested in this matter. It is a quantitative and qualitative approach of the subject

meant to be useful for anyone would read it.

Keywords: interest; loan; average rate; bank institutions; indicator

JEL classification: E43; E44; E52; E58; G12

1. Introduction

For over half a year, ROBOR has become an apple of discord in Romanian society, and there is no day

to appear in the media. Everyone talks with concern about ROBOR, making all sorts of scenarios more

or less pessimistic about its evolution. A simple search on Google for the word “ROBOR” shows that

there are about 1,890,000 results. Why and how did this phenomenon inflame the spirits? The cost of

credit in Romania is anyway much higher than any other country in the European Union, or else

Romania's financing costs, even as a country, are excessively high. Romania has been paying the highest

interest rate for its foreign loans from all the countries of the European Union for several years. But

because we cannot compare apples to pears, let compare apples to apples, and see how we face our

neighbors of suffering in the former communist East and outside the Euro zone: if we borrow at 4.79%

interest, the Hungarians interest rates are 2.68%, the Polishs at 2.69%, the Czechs at 1.76% and the

1 Professor, PhD, Danubius University of Galati, De partment of Economics, Romania, Address: 3 Galati Blvd., Galati 800654,

Romania, Tel.: +40372361102, Corresponding author: vioricapuscaciu@univ-danubius.ro.

2 Senior Lecturer, PhD, Danubius University of Galati, Department of Economics, Galati, Romania, Address: 3 Galati Blvd.,

Galati 800654, Romania, Tel.: +40372361102, E-mail: rosemarie.puscaciu@univ-danubius.ro.