Contagion risk and the interdependence of the main risks in the Romanian banking sector

Radu Muntean
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Radu Muntean: Bucharest University of Economic Studies, Romania

Theoretical and Applied Economics, 2014, vol. XXI, issue Special, 347-355

Abstract: This paper presents an analysis of the interdependence of the main risks in the Romanian banking sector. Given the dominant share of foreign capital, contagion risk is primarily manifested on the transmission channel of funds raised from non-resident credit institutions. Resident interbank exposures illustrate a level of internal contagion risk which, although relatively low, reacts to the fluctuations of the risks undertaken by credit institutions. Resuming lending on sustainable basis requires a strengthened macroeconomic environment, an adequate capitalization of credit institutions and maintaining the process of financial disintermediation in an orderly manner.

Keywords: contagion risk; financial disintermediation; credit risk; liquidity risk. (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:agr:journl:v:xxi:y:2014:i:special:p:347-355

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