Theoretical and Applied Economics
No. 2 / 2024 (639), Summer
Performance and risk – a changing and complex relationship for banking business
Bucharest University of Economic Studies, Romania
Adina Elena CĂLIN
Bucharest University of Economic Studies, Romania
Eugen-Marian VIERESCU
Bucharest University of Economic Studies, Romania
Abstract. The paper aims to analyse the evolution of the European banking sector between two global crises. It focuses on the factors that triggered the banking transformation after 2008 and on the interrelationship between business activity and risk related indicators. The research also considers the development of the banking sector and the necessity to be permanently equipped with the proper mitigation strategies for a constantly changing risk landscape. We selected the most important European banks that, during the entire analysed period, maintained their leading positions through increased financial performance and efficient risk management. The results of the study indicate that the profitability of European banks registered a mixed evolution, depending on the indicator considered for the analysis. In terms of risk, the strategic analysis of the Basel framework indicates a link between the state of the banking sector and the prudential framework when comparing the global financial crisis with the crisis generated by the Covid-19 pandemic. To enrich the research, we considered top 10 banking organisations from Western Europe and top 10 from Central and Eastern Europe. The results of the comparative analysis between West and East indicate structural differences that emerge as a result of different ways of doing banking business. Profitability and risk maintain their key importance, as the risk landscape evolved at the same pace with the banking activity. Besides the traditional financial risks, other factors of risk have reached an importance level which question the capacity of the risk management function at the level of banking organisations to keep up in a volatile, dynamic and complex environment.
Contents
Performance and risk – a changing and complex relationship for banking business
Impact of inflation and exchange rate on stock market returns in India: An ARDL approach
Westphalian order in pan-Arabism culture societies
The generational divide – A debate on technology and the decision-making process
The trend of FDI inflows and its impact on the Indian economy
Effects of exchange relative prices on macroeconomic stability in sub-Saharan African countries
Crowding-out, home bias and financial stability in the aftermath of the sovereign debt crisis
Is there convergence or divergence in per capita energy consumption in sub-Saharan African countries?
Financial transformation through digitalisation: India’s dual path of cash and cashless transaction
Nexus between global financial integration and economic growth: An ARDL approach
Integration of ESG principles: An initiative for transformation from Linear Economy to Circular Economy
European funds for sustainable transport and economic growth
What drives Tunisian economic growth: urbanization or rural development?
Impact of crypto currencies on performance of stock returns: Evidence from BRICS countries
Forecasting gold price and inflation for India and US: An analysis of ARIMA and Holt Winters models
ESG Global Score Indicator – The new sovereign rating Case study – European Union
Assessing the adoption of corporate social responsibility on developing countries: Case of Jordan
ICT and economic growth: Evidence from lower-middle income countries of South Asia
Future of cryptocurrency in India
The fintech frontier: Investigating fintech entrepreneurial intentions in the light of fintech awareness