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Provisioning Specific Credit Risk, The Major Problem Of The Romanian Banking System

Author

Listed:
  • Dana Gabriela SISEA

    (Faculty of Economics, Ecological University of Bucharest)

  • Valeria Arina MIRCEA (BALACEANU)

    (Faculty of Economics, Ecological University of Bucharest)

Abstract

Banking system, the financial system representative component delineates the decisive role that rests in financing the real economy and population. It is known that in almost all countries significant funds from bank loans companies. This situation is typical and the United States, the country where the grant funds can be easily raised. The role of banks in general and its lending activity in particular are both crucial for both developed economies and emerging economies, among which that of Romania, because they ensure continuous operation and efficiency. This goal but finds realization in terms of default risk materializes when they become nonperforming loans (non-performing loans - NPL), generating losses recoverable value. In order to cover these losses, banks are required to apply appropriate risk management arrangements. Between them enrol and specific credit risk provisioning problem quasi-general and permanent nature of the banking system in Romania.

Suggested Citation

  • Dana Gabriela SISEA & Valeria Arina MIRCEA (BALACEANU), 2014. "Provisioning Specific Credit Risk, The Major Problem Of The Romanian Banking System," Post-Crisis Trends - Working papers 08, Ecological University of Bucharest, Department of Economics.
    • Handle: RePEc:eub:wp2014:2014-08
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    More about this item

    Keywords

    credit risk provisions; non-performing loans; financial intermediation; substandard loans; debt service; principle decommissioning contamination;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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