INSOLVENCY AND BANK FINANCIAL POLICY

Insolvency is one of the most often used actions in the economic intern environment. This can be used by companies as a tool for obtaining the restructuring of bank loans or to provide shelter to enforcement. For banks, that means serious problems because they are forced to fully provisioned credit granted to companies that enter into insolvency, even if the rates are paid to date or with small delays, any guaranties was held. In this situation, for banks in Romania, the perception of risk is very high which blocks the credit. The purpose of this paper is to show how insolvency affects banking risks, with serious consequences on the national economy. The paper highlights the need to improve the regulations in order to make a better national business environment.Banking Risk, Risk Management, Insolvency, Credit Tightening

The impact of the financial crisis on the interbank money markets behavior. Evidence from several CEE transition economies

The liquidity problems that appeared on the interbank money markets during the financial crisis caused an increased volatility of the interbank interest rates, especially after September 2008. Banking institutions from the Euro zone have avoided the mutual funding, which resulted in a reduction of the interbank interest rates due to the excess liquidity on the interbank money markets. In these conditions we want to analyze the behavior of interbank interest rates for several CEE transition countries, responding to the following question: will they return to the long run equilibrium or will they follow a random walk? In our research we deal with unit root tests taking into consideration structural breaks and the persistence of the volatility. We also examine the long run equilibrium between the term structures of interest rates appealing at the cointegration analysis and proposing some Vector Autoregressive models. Finally, we asses the cointegration between the interbank money markets from Euro zone, Bulgaria, Czech Republic, Hungary, Poland and Romania and propose some volatility transmission models

The impact of the financial crisis on the interbank money markets behavior. Evidence from several CEE transition economies

The liquidity problems that appeared on the interbank money markets during the financial crisis caused an increased volatility of the interbank interest rates, especially after September 2008. Banking institutions from the Euro zone have avoided the mutual funding, which resulted in a reduction of the interbank interest rates due to the excess liquidity on the interbank money markets. In these conditions we want to analyze the behavior of interbank interest rates for several CEE transition countries, responding to the following question: will they return to the long run equilibrium or will they follow a random walk? In our research we deal with unit root tests taking into consideration structural breaks and the persistence of the volatility. We also examine the long run equilibrium between the term structures of interest rates appealing at the cointegration analysis and proposing some Vector Autoregressive models. Finally, we asses the cointegration between the interbank money markets from Euro zone, Bulgaria, Czech Republic, Hungary, Poland and Romania and propose some volatility transmission models

Economic Crises Deepen Country Budget Deficits and Deficits Deepen Economic Crises

In this paper we wish to point out that some measures taken by the government to reduce budget deficits in times of economic crisis have the opposite effect, i.e. widening budget deficit. In Romania’s case the measures are focused on increased taxation and reducing public spending instead of stimulating business environment in order to increase GDP. Most time even this increase in taxation and these spending reductions generates revenues reductions, thus deepen the deficit.budget deficits, economic crisis, increased taxation, spending reductions.