Banks’ Perspective Regarding Reputational Risk in Romania

Abstract

Banks’ reputation was severely deteriorated by the global financial crisis as public trust in banks diminished considerably. Based on this background, the goal of this paper is to assess the reputation risk perception from the Romanian banks’ standpoint, with focus on the post-crisis period. In order to achieve this purpose, we have resorted to a survey among the major banks operating in Romania and have investigated the regulatory measures implemented to increase trust in banks. The study results reveal that the importance of the reputation risk has increased over the past ten years and customer satisfaction is a relevant factor for bank reputation. The regulatory measures to enhance financial stability and trust in banks include strengthening capital requirements and macro prudential measures to avoid over-indebtedness of households.

Keywords

• reputational risk
• trust
• banking sector
• regulatory framework
• customer satisfaction
• romania