THE EFFECTS OF COVID-19 ON THE ROMANIAN BANKING SECTOR

Abstract

Covid-19 impacted the economy livelihood and had a lot of negative effects on many economic sectors, including banking. We aim to measure some of these effects over the listed Romanian banks. Through the lockdown, the authorities tried to stop the spread of the virus, but regrettably a part of population lost their job permanently or temporarily, or their incomes were reduced alarmingly. Being faced with such a situation and considering that one also must cover the basic needs, if you, too, are in the position and you have one or more loans at the bank, the next question you ask yourself is how will I manage to pay the installment? Event studies use data from the financial market, which gives them a high degree of veracity. They use statistical methods using time as a dependent variable and then look for variables that explain the duration of an event (or time until an event). The research was done over several years, and the banks included in the research were: Transylvania Bank and BRD - Groupe Société Générale and BET is the stock index used. Regarding the main methods which were applied we mention: descriptive statistics, time series (e.g. Augmented Dickey Fuller test), least square method, t-statistic test. The test results were positive and consistent with reality. This paper evaluates the major impact of Covid-19 on Romanian banks and was able to give us answers and solutions to countless questions.