Annales Universitatis Apulensis Series Oeconomica, 13(2), 2011 407 FINANCIAL SUPERVISION STRUCTURE IN ROMANIA. A COMPARATIVE APPROACH Vasile Cocriş 1 Bogdan Căpraru 2 ABSTRACT: In this paper we assess the financial supervision and regulation structure in Romania. To this purpose, we calculate and interpret the Financial Supervision Unification Index (FSU Index) and the Central Bank as Financial Authority Index (CBFA) at the level of the year 2011 (August), according to Masciandaro’s methodology (2004) for all EU27 member countries in order to make comparisons with the Romanian ones. We propose a change in the present Romanian financial supervisory regime from the silos model to a hybrid one, arrangement that supposes a combination of the sectoral model with the objectives-centred model. Keywords: central bank, financial stability, Romanian financial supervision and regulation structure, the FSU Index, the CBFA Index JEL codes: E58, G18, G28, L51 Introduction In the context of present financial turmoil, the importance of banking supervision and regulation in order to maintain the financial stability became a very important issue for central bank and supervision authorities. The international financial crisis started in the USA was felt within the Romanian banking system in October 2008 through turbulence on the domestic monetary market. In the next year, this increased in intensity and the banking activity in Romania was faced with downfall. The main effect was the slow-down of the development pace of non-governmental loan, due to the decrease in both demand and offer. As a result of the aggressive crediting policy developed in the last years and the worsening of the financial situation of many companies and population, throughout the year 2009 the quality of the loans’ portfolio began to continuously deteriorate. In this paper we assess the financial supervision and regulation structure in Romania. The paper is structured as follows: the first part consists of a brief literature review while in the second section we assess the Romanian regulation and supervision architecture. To this purpose, we calculate and interpret the Financial Supervision Unification Index (FSU Index) and the Central Bank as Financial Authority Index (CBFA) at the level of the year 2011 (August), according to Masciandaro’s methodology (2004) for all EU27 member countries in order to make comparisons with Romanian ones. In the end, we will present the conclusions of this study and some policy recommendations. This paper is relevant not only for the research in the area, but for policy makers. It discusses about the financial supervision structure in Romania and proposes a change in the present architecture. Also, using the Masciandaro’s methodology, we assess how the financial supervision and regulatory structure had developed in EU27 countries between 2004-2011, underling the implication of European integration process and the international financial crises started in august 2007. We indentify a profile of financial supervision and regulatory structure in Romania 1 “Al. I. Cuza University of Iaşi, Faculty of Economics and Business Administration, Romania, e-mail: vcocris@uaic.ro 2 “Al. I. Cuza University of Iaşi, Faculty of Economics and Business Administration, Romania, e-mail: csb@uaic.ro