The Decline of Traditional Banking Activities

The decline of traditional banking activities raise the issue of efficiency of financial stability, in terms ofquantitative and qualitative aspects – the increasing danger of banking failures as well as of susceptibility due toincreased propensity of banking institutions to assume additional to risk...

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Main Authors: Gabriela Cornelia Piciu, Georgiana Chitiga, Nicoleta Mihaila, Carmen Trica
Format: Article
Language:English
Published: Danubius University 2011-05-01
Series:EIRP Proceedings
Subjects:
Online Access:http://www.proceedings.univ-danubius.ro/index.php/eirp/article/view/772/699
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author Gabriela Cornelia Piciu
Georgiana Chitiga
Nicoleta Mihaila
Carmen Trica
author_facet Gabriela Cornelia Piciu
Georgiana Chitiga
Nicoleta Mihaila
Carmen Trica
author_sort Gabriela Cornelia Piciu
collection DOAJ
description The decline of traditional banking activities raise the issue of efficiency of financial stability, in terms ofquantitative and qualitative aspects – the increasing danger of banking failures as well as of susceptibility due toincreased propensity of banking institutions to assume additional to risks either in the form of riskier loans offer orengaging in other "non-traditional" financial activities which give a promise for greater profitability, but also higherrisks. Non-traditional activities of banking as financial products dealers (financial derivatives), generate an increasingrisks and vulnerabilities in the form of moral hazard issues. That is the reason why and these activities should beregulated as well as are the traditional activities. Challenges posed by the decline of traditional banking activities istwofold: the stability of the banking system must be maintained, while the banking system needs to be restructured toachieve financial stability in the long run. One possible way is an appropriate regulatory framework to encourage atransition period of changing the structure of banking activity(reduction of traditional activities and expanding nontraditional activities) to enable banking institutions to perform a deep methodic analysis of non traditional activities,oriented to the financial banking efficiency.
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spelling doaj.art-237f0d3e89494106bd542058919fbbc82022-12-22T02:01:43ZengDanubius UniversityEIRP Proceedings2067-92112069-93442011-05-0161351356The Decline of Traditional Banking ActivitiesGabriela Cornelia PiciuGeorgiana ChitigaNicoleta MihailaCarmen TricaThe decline of traditional banking activities raise the issue of efficiency of financial stability, in terms ofquantitative and qualitative aspects – the increasing danger of banking failures as well as of susceptibility due toincreased propensity of banking institutions to assume additional to risks either in the form of riskier loans offer orengaging in other "non-traditional" financial activities which give a promise for greater profitability, but also higherrisks. Non-traditional activities of banking as financial products dealers (financial derivatives), generate an increasingrisks and vulnerabilities in the form of moral hazard issues. That is the reason why and these activities should beregulated as well as are the traditional activities. Challenges posed by the decline of traditional banking activities istwofold: the stability of the banking system must be maintained, while the banking system needs to be restructured toachieve financial stability in the long run. One possible way is an appropriate regulatory framework to encourage atransition period of changing the structure of banking activity(reduction of traditional activities and expanding nontraditional activities) to enable banking institutions to perform a deep methodic analysis of non traditional activities,oriented to the financial banking efficiency.http://www.proceedings.univ-danubius.ro/index.php/eirp/article/view/772/699traditional banking activitiesquantitative aspect squalitative aspects
spellingShingle Gabriela Cornelia Piciu
Georgiana Chitiga
Nicoleta Mihaila
Carmen Trica
The Decline of Traditional Banking Activities
EIRP Proceedings
traditional banking activities
quantitative aspect s
qualitative aspects
title The Decline of Traditional Banking Activities
title_full The Decline of Traditional Banking Activities
title_fullStr The Decline of Traditional Banking Activities
title_full_unstemmed The Decline of Traditional Banking Activities
title_short The Decline of Traditional Banking Activities
title_sort decline of traditional banking activities
topic traditional banking activities
quantitative aspect s
qualitative aspects
url http://www.proceedings.univ-danubius.ro/index.php/eirp/article/view/772/699
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