Interbank rates are affected by the monetary policy of a country and represent a link to other financial and credit markets. In 2007, Romania became a member of the European Union and its central bank, the National Bank of Romania (NBR), joined the European System of Central Banks (ESCB) but not the Eurosystem. This paper analyses the role of the central bank and the use of its instruments concerning interbank rates. The research evaluates the influence of the Romanian Central Bank on interbank rates and shows that the policy rate and bank liquidity are among the main determinants of interbank rate movements. It is also presented that the NBR’s deposit and lending rates can limit the free movements of the interbank rate of interest. This research confirms that interbank interest rates influence bank rates strongly. The methodology used in this research includes cointegration, dynamic econometric measurement and analyses with Granger causality. Our research uses mainly ROBID and ROBOR of different maturities, showing that the influence of the Romanian Central Bank (NBR) on the interbank rate is strong, while the influence of the ECB and Fed is weak.
European interest rates movements are affected by various internal and external factors. This paper studies the link between European and American short- and long-term interest rates. In particular, we consider the forward interest rates coming from euro and dollar IRS term structures. The econometric techniques employed are co-integration, Granger-causality, OLS and GMM. Our results indicate that European remote settlement forward and long-term interest rates are primarily driven by US rates and confirm that the causality acts mainly from the US to the Eurozone. This was true even during the recent periods of European Central Bank quantitative easing. These factors weaken the ECB’s ability to intervene. In fact, we found the impact of American monetary policy on long-term interest rates to be also relevant for European bonds.
Economic diplomacy is known as a symbol of the European Union and represents its primary function. With the development of science and new ways of communication, the European Union can organize a new approach for its economic diplomacy. The main advantage of the European Union as a soft power is that its economic and diplomatic interests are represented in a manner that is based not on confrontation but economic collaboration with other states. The disadvantage is that this domain is presently not used enough to represent EU interests. This paper describes economic diplomacy in general and the economic diplomacy of the EU in particular. Divided into three parts, the goal of this study is to outline the importance of economic diplomacy, its evolution, the influence of this domain on the creation of previous economic treaties, and its possible future impact on the development of new agreements between the European Union and its neighbor countries. The main methodology used is descriptive, presenting the evolution of this field and the new business strategies that can be used to improve cooperation at the eastern border of the European Union. Therefore we present here the historical background of EU economic diplomacy, its present issues and future challenges. The quantitative data used in this research paper are based on information from EU websites and on the actual events concerning debates about economic diplomacy and its future.
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