Abstract
The mortgage credit market represents one of the most significant segments of banking activity, playing a crucial
role in financial intermediation, household wealth accumulation, and economic growth. At the same time, excessive
mortgage lending may contribute to the build-up of systemic vulnerabilities and financial instability. Against the
backdrop of increasing macroeconomic uncertainty, inflationary pressures, energy market volatility, and geopolitical
tensions, understanding the determinants of mortgage lending dynamics has become increasingly important for both
policymakers and financial institutions.
This study investigates the evolution of the Romanian mortgage credit market and examines its implications for
banking sector stability over the period 2000–2025. The analysis focuses on the influence of key macroeconomic
variables, including interest rates, inflation, household income, housing prices, and monetary policy conditions.
Particular attention is paid to the transmission channels through which external shocks, especially energy price
fluctuations and geopolitical disruptions, affect mortgage lending activity and financial stability.
Using a descriptive and analytical research framework based on data provided by the National Bank of
Romania, Eurostat, and financial stability reports, the study identifies a cyclical pattern in mortgage market development
characterized by alternating phases of expansion, contraction, and recovery. The findings reveal a strong inverse
relationship between interest rates and the volume of newly granted mortgage loans, while the outstanding stock of
housing loans continues to demonstrate long-term growth. Furthermore, the results indicate that inflationary pressures
and energy-related shocks indirectly influence mortgage lending through their impact on monetary policy decisions and
borrowers’ repayment capacity.
The study concludes that the Romanian mortgage credit market remains highly sensitive to both domestic
macroeconomic conditions and external disturbances. Consequently, prudent lending practices, effective risk
management strategies, and continuous monitoring of systemic vulnerabilities are essential for maintaining financial
stability and supporting sustainable credit market development.
role in financial intermediation, household wealth accumulation, and economic growth. At the same time, excessive
mortgage lending may contribute to the build-up of systemic vulnerabilities and financial instability. Against the
backdrop of increasing macroeconomic uncertainty, inflationary pressures, energy market volatility, and geopolitical
tensions, understanding the determinants of mortgage lending dynamics has become increasingly important for both
policymakers and financial institutions.
This study investigates the evolution of the Romanian mortgage credit market and examines its implications for
banking sector stability over the period 2000–2025. The analysis focuses on the influence of key macroeconomic
variables, including interest rates, inflation, household income, housing prices, and monetary policy conditions.
Particular attention is paid to the transmission channels through which external shocks, especially energy price
fluctuations and geopolitical disruptions, affect mortgage lending activity and financial stability.
Using a descriptive and analytical research framework based on data provided by the National Bank of
Romania, Eurostat, and financial stability reports, the study identifies a cyclical pattern in mortgage market development
characterized by alternating phases of expansion, contraction, and recovery. The findings reveal a strong inverse
relationship between interest rates and the volume of newly granted mortgage loans, while the outstanding stock of
housing loans continues to demonstrate long-term growth. Furthermore, the results indicate that inflationary pressures
and energy-related shocks indirectly influence mortgage lending through their impact on monetary policy decisions and
borrowers’ repayment capacity.
The study concludes that the Romanian mortgage credit market remains highly sensitive to both domestic
macroeconomic conditions and external disturbances. Consequently, prudent lending practices, effective risk
management strategies, and continuous monitoring of systemic vulnerabilities are essential for maintaining financial
stability and supporting sustainable credit market development.
Cuvinte cheie
mortgage lending
financial stability
banking sector
systemic risk
inflation
monetary policy
housing finance
Istoric articol
Publicat
26.06.2026
Informații autori
Citare recomandată
GABRIELA CORINA SLUSARIUC (2026). MORTGAGE MARKET DYNAMICS, MACROECONOMIC SHOCKS AND FINANCIAL STABILITY: EVIDENCE FROM ROMANIA. Constantin Brâncuși University of Târgu Jiu Economics Series, 1(3), 243–254. https://doi.org/10.65631/jes.3.2026.22
Referințe bibliografice
[1] Acharya, V. (2009). A theory of systemic risk and design of prudential bank regulation. Journal of Financial Stability, 5(3), 224–255. https://doi.org/10.1016/j.jfs.2009.02.001
[2] Bobiceanu, A. M. (2022). Covid Crisis Effects on Lending in the Romanian Banking Market. Review of Economic and Business Studies, 15(2), 123-141. https://doi.org
[3] Borio, C. (2011). Implementing a macroprudential framework: Blending boldness and realism. Capitalism and Society, 6(1), Article 1. https://doi.org/10.2202/1932-0213.1083
[4] Brunnermeier, M. K. (2009). Deciphering the liquidity and credit crunch 2007–2008. Journal of Economic Perspectives, 23(1), 77–100.
[5] Cerutti, E., Dagher, J., & Dell’Ariccia, G. (2017). Housing finance and real-estate booms: A cross-country perspective. Journal of Housing Economics, 38, 1–13.
[6] Claessens, S., Kose, M. A., & Terrones, M. E. (2012). How do business and financial cycles interact? Journal of International Economics, 87(1), 178–190.
[7] Crowe, C., Dell’Ariccia, G., Igan, D., & Rabanal, P. (2013). How to deal with real estate booms: Lessons from country experiences. Journal of Financial Stability, 9(3), 300–319.
[8] Dobre, A., & Fortea, C. (2024). Approaches to the Impact of Non-Performing Loans on the Romanian Economy: From ROBOR to IRCC Dynamics. Journal of Financial Studies, 9(1), 45-62.
[9] European Central Bank. (2023). Financial Stability Review. Frankfurt am Main:ECB.
[10]
Fărcaş G., The Impact Of The Global Finanicial Crisis On The Romanian Banking
Industry. Annals-Economy Series 3 (2025): 262-267.
[11] Goodhart, C. A. E. (2008). The background to the 2007 financial crisis. International Economics and Economic Policy, 4(4), 331–346.
[12] Jordà, Ò., Schularick, M., & Taylor, A. M. (2016). The great mortgaging: Housing finance, crises and business cycles. Economic Policy, 31(85), 107–152.
[13] Huidumac Petrescu, C. E., & Pop, A. (2023). Bank Lending and Financial Stability in Romania after the Covid-19 Pandemic. Ovidius University Annals, Economic Sciences Series, 23(1), 210-218.
[14] Kiyotaki, N., & Moore, J. (1997). Credit cycles. Journal of Political Economy, 105(2), 211248.
[15] Levine, R. (2005). Finance and growth: Theory and evidence. In P. Aghion & S. Durlauf (Eds.), Handbook of Economic Growth (Vol. 1A, pp. 865–934). Amsterdam: Elsevier.