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Competition and Consumer Protection in the Romanian Banking Sector

Author

Listed:
  • Viorela Iacovoiu
  • Adrian Stancu

Abstract

This study highlights the relationship between the competitive environment in the domestic banking sector and the protection of consumers’ rights and interests. The research is focused on three areas: analysis of the competitive environment, based on detailed analysis of the degree of concentration, the average interest rate s pread on loans and deposits, and clients’ mobility; analysis of the distribution and causes of the complaints made by consumers of banking products and services ; the correlation between the bank's market share and the number of complaints registered by it, using the ranks difference correlation nonparametric Spearman's test. The results of the analysis highlighted a strong and direct relationship between the competitive position of the bank and the number of the complaints it registered, proving that the competitive environment in the banking sector does not ensure the real protection of consumers’ rights and interests . Considering the results of the research, we proposed at the end of the study, clear and consistent measures in order to: improve the consumers’ financial literacy; reduce information asymmetry and stimulate competition in the banking sector; increase consumers’ trust in the financial sector; generate beneficial and sustainable effects .

Suggested Citation

  • Viorela Iacovoiu & Adrian Stancu, 2017. "Competition and Consumer Protection in the Romanian Banking Sector," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 19(45), pages 381-381, May.
    • Handle: RePEc:aes:amfeco:v:45:y:2017:i:19:p:381
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    References listed on IDEAS

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    1. Sarah Brown & Gaia Garino & Karl Taylor & Stephen Wheatley Price, 2005. "Debt and Financial Expectations: An Individual- and Household-Level Analysis," Economic Inquiry, Western Economic Association International, vol. 43(1), pages 100-120, January.
    2. World Bank, 2012. "Good Practices for Financial Consumer Protection," World Bank Publications - Reports 26861, The World Bank Group.
    3. Armstrong, Mark, 2008. "Interactions between competition and consumer policy," MPRA Paper 7258, University Library of Munich, Germany.
    4. Adele Atkinson & Flore-Anne Messy, 2012. "Measuring Financial Literacy: Results of the OECD / International Network on Financial Education (INFE) Pilot Study," OECD Working Papers on Finance, Insurance and Private Pensions 15, OECD Publishing.
    5. Gathergood, John, 2012. "Self-control, financial literacy and consumer over-indebtedness," Journal of Economic Psychology, Elsevier, vol. 33(3), pages 590-602.
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    Cited by:

    1. Alfonso Siano & Lukman Raimi & Maria Palazzo & Mirela Clementina Panait, 2020. "Mobile Banking: An Innovative Solution for Increasing Financial Inclusion in Sub-Saharan African Countries: Evidence from Nigeria," Sustainability, MDPI, vol. 12(23), pages 1-24, December.
    2. Valentina Vasile & Mirela Panait & Simona-Andreea Apostu, 2021. "Financial Inclusion Paradigm Shift in the Postpandemic Period. Digital-Divide and Gender Gap," IJERPH, MDPI, vol. 18(20), pages 1-28, October.
    3. Mariana Bunea & Vasile Dinu, 2019. "The BASEL III impact on the Romanian Banks’s Solvency," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 15(1), pages 189-199.
    4. Mirela PANAIT & Irina RADULESCU & Catalin VOICA, 2018. "Financial Inclusion and Vulnerabilities Generated by the International Crisis," Romanian Journal of Economics, Institute of National Economy, vol. 47(2(56)), pages 71-81, Decembre.
    5. Mikhail Kulapov & Yuriy Odegov & Vera Sidorova & Nikolay Sidorov & Elena Zotova, 2019. "Corporate Culture of Organization - Typical and Russian model with the Context of Its Risks and Implications," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 15(1), pages 215-226.
    6. Nicoleta Andreea Neacșu & Carmen Elena Anton & Camelia Mirela Baba & Anca Popescu, 2023. "Financial and Banking Education of Consumers in the Context of Sustainable Development Society," Sustainability, MDPI, vol. 15(13), pages 1-22, June.

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    More about this item

    Keywords

    competition; consumer protection; banking sector; Herfindahl-Hirschman Index; client mobility; complaint; Spearman’s correlation coefficient.;
    All these keywords.

    JEL classification:

    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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