INVESTIGATING BANKING HOUSEHOLDS' DEPOSITS USING VECTOR
               AUTOREGRESSIVE MODEL VAR


          Adina Elena Dănuleţiu, “1 Decembrie 1918” University of Alba Iulia, Romania
           Iulia Cristina Iuga, “1 Decembrie 1918” University of Alba Iulia, Romania
               Adela Socol, “1 Decembrie 1918” University of Alba Iulia, Romania


ABSTRACT: Nowadays, settling a proper and adequate relationship with the customers became a
concern of the banks, that have to "back to basics" and obtain the trust when interact with customers.
Banking customers represented by the population's householders matter in banks' financing if we
retain that in the last year, the household deposits represented 29.2% of total liabilities of credit
institutions active in Romania. This paper argues that in order to study the influence factors that
affect the banking customers' behavior, it is important to consider the saving process of banking
customers as an exogenous dynamic phenomenon, while the study does not deny, but it not
approached another face of thinks - the endogenous influences. The paper examines if there exist any
long-run relationships between deposits made by the population's householders and their behavior
influenced by the interest rate on the deposits set up in banks by householders, the unemployment
rate, the monthly net wages in the economy and the consumer price index. We provide an unrestricted
Vector Autoregression Model (VAR) in order to investigate the relationship between variables
mentioned above, using the data set on Romanian banking system, which covers the period January
2007 - December 2012. Our research confirms the impact that the interest rate on deposits has on
the banking customers' behavior, mirrored in the deposits made with active banks in Romania by the
population's householders.

Keywords: banking customers' behavior, deposits, Vector Autoregressive Model, impulse response, exogenous
factors

JEL Codes: D12, C58, G21