THE ROLE OF THE NATIONAL BANK OF ROMANIA IN REGULATING THE BANKING DIVIDEND POLICY – AN ESSENTIAL COMPONENT OF BANKING SUPERVISION

Abstract

In the Romanian banking system, National Bank of Romania (Banca Nationala a Romaniei) in the institution which, according to Romanian law, is assigned, on one hand, with the “exclusive jurisdiction to authorize credit institutions” and, on the other hand, with the responsibility for “prudential supervision of credit institutions that authorized them to operate in Romania”. One of the most important ‘tools’ at the command of National Bank of Romania in its ‘arsenal’ it uses to exert its prudential supervision of credit institutions is the dividend policy, as a means to ‘streamline’ shareholder returns so as to make sure capital will be available for the need of absorbing (potential) losses and also to make lending still possible, especially so during an economic crisis. For this – in principle –, prudential supervision can be exerted through restricting dividend payments to stakeholders in order to increase banks' capital buffers and their lending capacity.

JEL Classification

E50, E58

Keywords

prudential supervision, dividend, returns

How to cite

MILITARU, Iuliana (2025). THE ROLE OF THE NATIONAL BANK OF ROMANIA IN REGULATING THE BANKING DIVIDEND POLICY – AN ESSENTIAL COMPONENT OF BANKING SUPERVISION. Journal of Financial Management and Economics, 13(1), 139-144. DOI: 10.65672/jfme.2025.1.12.

RePEc record

Handle: Repec:vls:rojfme:v:13:y:2025:i:1:p:139-144