BANKING INNOVATIONS RISK – PROFITABILITY RELATIONSHIP IN THE BANKING SYSTEM OF THE REPUBLIC OF MOLDOVA

The level of information technologies development in modern banks represents an essential factor in maintenance and consolidation of the position on the market. In this respect all Moldovan banks develop risk management policies with regard to banking IT’s and e-products and services, which they consider as the main part of banking innovations at the moment. The purpose of this article is to analyze each innovation (Information Security Services, Business Systems Controls, Business Continuity Management, IT Outsourcing, Information Systems Governance, IT Performance, Project Risk Management, IT Internal Audit) in terms of risks and benefits when these risks are managed properly.banking system, risk, information technologies

Financial development, economic growth and corporate governance : paper presented at the First Annual Seminar on New Development Finance held at the Goethe University of Frankfurt, September 22 - October 3, 1997

During the last years the relationship between financial development and economic growth has received widespread attention in the literature on growth and development. This paper summarises in its first part the results of this research, stressing the growth-enhancing effects of an increased interpersonal re-allocation of resources promoted by financial development. The second part of the paper seeks to identify the determinants of financial development based on Diamond's theory of financial intermediation as delegated monitoring. The analysis shows that the quality of corporate governance of banks is the key factor in financial system development. Accordingly, financial sector reforms in developing countries will only succeed if they strengthen the corporate governance of financial institutions. In this area, financial institution building has an important contribution to make. Paper presented at the First Annual Seminar on New Development Finance held at the Goethe University of Frankfurt, September 22 - October 3, 199

Efficient systems for the securities transaction industry : a framework for the European Union

This paper provides a framework for the securities transaction industry in the EU to understand the functions performed, the institutions involved and the parameters concerned that shape market and ownership structure. Of particular interest are microeconomic incentives of the industry players that can be in contradiction to social welfare. We evaluate the three functions and the strategic parameters - the boundary decision, the communication standard employed and the governance implemented - along the lines of three efficiency concepts. By structuring the main factors that influence these concepts and by describing the underlying trade-offs among them, we provide insight into a highly complex industry. Applying our framework, the paper describes and analyzes three consistent systems for the securities transaction industry. We point out that one of the systems, denoted as 'contestable monopolies', demonstrates a superior overall efficiency while it might be the most sensitive in terms of configuration accuracy and thus difficult to achieve and sustain

Review of ownership structures and banking efficiency: Implication to ASEAN-5

Ownership structure is known as the distribution of equity with relation to votes, capital and the identity of equity owners (Holderness et al., 1999). Ownership structure served as an important element in corporate governance by influencing the type of incentives managers receives from the firm. This paper reviews recent studies on the effect of ownership structure on banking efficiency in the developing countries with the focus on ASEAN countries. Review of previous studies clearly indicates that types of ownerships did exert some influences towards the performance of the banks in terms of efficiency. Even though publicly-owned banks operated in an economically inefficiency environment, it is undeniable that the existence of publicly-owned banks are needed especially in economically less stable countries. This is because the government-owned banks or the state-owned banks can act as a catalyst to ensure the development of certain priority sectors that are believed to contribute to the long run economic growth of the countries. Besides that, the existence of state-owned banks and government-ownership is crucial for the countries to have a balance social and economic objective. In addition, countries need to encourage the entry for foreign participants into the banking sectors to improve the quality and availability of the financial services towards the domestic financial market (Levine, 1996). The entry will encourage domestic banks to compete more efficiently in terms of costs and profits in order to survive in this environment. The spillover effects in terms of technology brought by the foreign participant will enable the creation of a more modern banking environment in the host countries. Not only that, with a balance combination of state-, privately-, and foreign-owned banks, it is believed that the banking industry in the developing countries will be able to survive in the competitive environment while helping the government effectively implement the macroeconomics policies in the long run

China's new corporate rescue laws: perspectives and principles

This article considers the new corporate insolvency legislation that came into force in China in June 2007. This law is part of a remarkable transformation in the Chinese economy in recent years. Significant numbers of ailing state owned enterprises have been reformed and subjected to hard budgetary constraints, while the private sector has grown dramatically. Market forces play a greater role, whereas the economy was previously tightly controlled by the state. These changes, together with pressures arising from external bodies such as the European Union, led to an urgent need for the adoption of the revised insolvency law, which has at its heart corporate rescue procedures. This article considers the content of this new law, the background to it, and also assesses the prospects for its operation. In particular attention is paid to the level of scope for state interference in the operation of the law

Value Through Diversity: Microfinance and Islamic Finance and Global Banking

Internet resources, extended media coverage and international organizations’ reports recently witness the increasing interest of western banks in new models of finance, particularly Islamic finance and microfinance. This new trend is not only channeled through the frame of corporate social responsibilities programs and policies or limited to ad hoc financial institutions (like microcredit banks or Islamic banks) as it is entering the financial offer of mainstream banks. The paper primarily outlines that many elements of microfinance could be considered consistent with the broader goals of Islamic banking. Apart from pure economic considerations which are not the aim of this analysis, the paper supports the thesis that by addressing new markets and embracing unconventional financial proposals, the global banking sector can contribute to the quest for diversity-oriented policies posed by an increasingly globalised scenario. The consequences this new trend is likely to have on inner banking structures are still unknown and are likely to interest the issue of wealth distribution. Moreover, from a more general point of view, by showing that even different moral ethos deep rooted in different cultural paradigms can be as profitable and available as western capitalistic ones, the banking sector can play a potential role in disseminating awareness on specific cultural and religious issues, resulting in increased integration of Muslim communities and low income investors in the long run and supporting commercial banks the close relation between economy and culture.Microfinance, Islamic finance, Diversity, Multiculturalism, Global banking