Bank de-risking impacts on finance and development. The case of Romania

Georgescu, George (2017): Bank de-risking impacts on finance and development. The case of Romania.

Abstract

The study aims to investigate the causes, external manifestations and impacts of de-risking phenomenon, increasingly rendered visible in the last years on international financial markets, under the circumstances of the post-crisis global economic developments. The paper reveals that this phenomenon is still little discussed and understood by academics and institutional organizations, consequently, being ignored any theoretical foundation or arguments for the possible guidance, between one or other direction, of policies, norms and regulatory practices in order to monitor and address the slippages with adverse effects. In the paper, the stage of actual knowledge of this phenomenon, as concerns the different forms in which comes out, the main causes and factors of influence, the adverse impact observed and possible counteracting measures is presented. The analysis of the extent to which Romania is affected by de-risking, more visible by reducting the number of clients and financial transactions, halving the non-performing loans of the banking system, having also an important social dimension, in the light of the low level of financial inclusion. The paper presents some reference points for decoding this phenomenon, proposing new directions for more in-depth scientific researches, focusing on the identification of specific solutions based on customized analysis, including for Romania’s case, considering the trade-off options, such as stability versus prudentiality in risk taking and risk management, profitability versus social responsibility under uncertainty conditions, banking system interests versus interests of regulatory and supervisory institutions, monetary policies versus government policy and strategies.

• Item Type: MPRA Paper
• Language: English
• Keywords: de-risking; banking system; corresponding banks; AML/CFT; financial stability; non-performing loans; financial inclusion
• Subjects: E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E44 - Financial Markets and the Macroeconomy; F - International Economics > F2 - International Factor Movements and International Business > F24 - Remittances; F - International Economics > F3 - International Finance > F38 - International Financial Policy: Financial Transactions Tax; Capital Controls; G - Financial Economics > G0 - General > G01 - Financial Crises; G - Financial Economics > G1 - General Financial Markets > G15 - International Financial Markets; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O16 - Financial Markets ; Saving and Capital Investment ; Corporate Finance and Governance

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