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Possible Motivations for the Romanian Banking System to Intensify the Use of Financial DerivativesAbstract:The involvement of commercial banks in transactions with financial derivatives is one of the most controversial topics of the moment. This paper does not aim to resolve the controversy over the relationship between the benefits and the risks of using derivatives by banks, but to find some possible motivations for the banking system in Romania to become more interested in these instruments. The study allowed us to identify at least two reasons for using derivatives by the banks in Romania: the alarming increase of risks in the lending activity and the decrease of profitability of the traditional banking activities. The conclusion that we drew from the analysis is that derivatives may constitute an important tool for hedging credit risk and revival of the banking sector in Romania, provided that they are used with caution by banks

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  • Ghita-Mitrescu Silvia
  • Moraru Andreea-Daniela
  • Duhnea Cristina

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  • Ghita-Mitrescu Silvia & Moraru Andreea-Daniela & Duhnea Cristina, 2013. "Possible Motivations for the Romanian Banking System to Intensify the Use of Financial DerivativesAbstract:The involvement of commercial banks in transactions with financial derivatives is one of the ," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 589-593, May.
    • Handle: RePEc:ovi:oviste:v:xiii:y:2013:i:2:p:589-593
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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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