The evolution of the banking sector in the Republic of Moldova from the perspective of economic resilience

Abstract

The banking sector in the Republic of Moldova has undergone significant transformation since the country’s independence in 1991. This evolution is closely tied to the nation’s broader economic trajectory and its ability to withstand various internal and external shocks. From the collapse of the Soviet economic system to the implementation of market-based reforms, the Moldovan banking sector has had to navigate a series of financial crises, regulatory changes, and geopolitical challenges. This paper examines the evolution of Moldova’s banking sector from the perspective of economic resilience, focusing on its capacity to absorb shocks and adapt to changing economic conditions. The study highlights key phases in the development of the banking system, including the post-Soviet transition period, the consolidation of the banking sector, and the 2008 global financial crisis, which exposed vulnerabilities in Moldova's financial system. It further explores the effects of the 2014 "billion-dollar theft" on public trust in banks and the subsequent reforms implemented by the National Bank of Moldova to restore stability and strengthen financial supervision. Through a mixed-methods approach, combining qualitative interviews with banking professionals and quantitative analysis of key financial indicators, this research assesses how regulatory frameworks, institutional reforms, and macroeconomic factors have influenced the resilience of the banking sector. It concludes by discussing the ongoing challenges and opportunities for the sector in the face of economic volatility, political instability, and the evolving role of remittances in Moldova's economy. The findings suggest that while significant progress has been made in enhancing the banking system's resilience, the sector must continue to adapt to both domestic and global economic pressures to ensure long-term stability and growth. The article was developed within the framework of Subprogram 030101 „Strengthening the resilience, competitiveness, and sustainability of the economy of the Republic of Moldova in the context of the accession process to the European Union”, institutional funding.