Abstract. On the general background of restructuring and privatization processes in Romanian banking system, the presence of foreign capital recorded an increasingly trend after 1996, especially in the form of banks located in Romania. The foreign banks involved in Romania, especially multinational banks’ affiliates, proved to be remarkable about capital adequacy and profitability. All these developments are driven both by the access to cheaper resources from their parent bank or other banks in the group and by a more pronounced propensity to risk, as they are fully covered.

Keywords: Romania; foreign banks; financial intermediation; capital adequacy; profitability.