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The Importance of Banks in Foreign Exchange and the Implications of the Currency Risk over the Bank Management

Author

Listed:
  • Vasile DEDU

    (The Bucharest Academy of Economic Studies, Romania)

  • Florin Alexandru DUNA

    (The Bucharest Academy of Economic Studies, Romania)

Abstract

The concentration and the role of the banks in the development of the currency market represents the first element on influencing the major players and their strategies on a global scale. The currency market is considered the system of the relations between financial and currency exchanges explained by the relation of buying and selling currency or buying-selling deposits throughout foreign coins. This market is also called FOREX (Foreign exchange market), being the biggest financial market in the world. The overcome of borders and the globalization of markets and countries conducted to the internationalization of monetary markets that have great implications in the currency risk of the banks. This paper aims to highlight the main features of the Forex currency market in the light of the extraordinary needs and ability of the banks and the financial system to assure the stability, which not only support the economy but also develop a complex sistem of instruments, transactions - both in the capital market and especially on the currency market - but also by products and derivatives in order to complete the proper satisfaction of clients and other banks. Next to these we add an imminent importance is established by the currency risk, which tend to ensure stability in the current crisis and understanding the tools and policies in global banking, the main goal being the control of national and international financial standards in banks and economy by conducting a stable bank management.

Suggested Citation

  • Vasile DEDU & Florin Alexandru DUNA, 2011. "The Importance of Banks in Foreign Exchange and the Implications of the Currency Risk over the Bank Management," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 12(6), pages 291-295, December.
  • Handle: RePEc:rom:rmcimn:v:12:y:2011:i:6:p:291-295
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    More about this item

    Keywords

    currency market; financial markets; currency risk; bank management; globalization and internationalization; transaction; exchange; derivatives implications of currency risk.;

    JEL classification:

    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General

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