OPERATIONAL RISK AND FDI IN THE BANKING SECTOR

Roxana Hetes Ph. D, oana Miru Ph. D Candidate, Assist. Oana Lobont PhD and Assist. Cristina Nicolescu PhD
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Roxana Hetes Ph. D: West University of Timisoara Faculty of Economics and Business Administration Timisoara, Romania
oana Miru Ph. D Candidate: West University of Timisoara Faculty of Economics and Business Administration Timisoara, Romania
Assist. Oana Lobont PhD: West University of Timisoara Faculty of Economics and Business Administration Timisoara, Romania
Assist. Cristina Nicolescu PhD: West University of Timisoara Faculty of Economics and Business Administration Timisoara, Romania

Annals of University of Craiova - Economic Sciences Series, 2010, vol. 2, issue 38, 6

Abstract: In general, the academin literature has paid its attention to market risk and credit risk and ignored operational risk, an "umbrella" term that includes problems with information systems, operational problems, breaches in internal control, fraud, or unforeseen catastrophes such as 9-11 or SARS. The negative impact of operational risk on banks net profit, lead to the conclusion that operational risk is to be considered one of the key drivers for furure profits. Analysing information provided by financial institutions and empirical experience, the paper concludes that not only there is a strong connection between the FDI and operational risk but the link between the two has a double sense of "incentive-effect", one is influenced by the other and vice-versa.

Keywords: operational risk; foreign direct investments; banking sector (search for similar items in EconPapers)
JEL-codes: G11 G21 G32 (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:aio:aucsse:v:2:y:2010:i:6:p:276-281

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