A new Risk Strategy for European Cooperative Banks in contemporary economic crisis

• Author: Liliana-Aurora Constantinescu - Adrian Constantinescu - Alexandra-Cristina Dumitrescu
• Position: Associate Professor, Ph.D., Faculty of Finance, banking and accountancy/Department: Finance, banking and accountancy, 'Dimitrie Cantemir' Christian University, Romania - PhD student, Faculty of Economy Science/Department: Economy, 'Lucian Blaga' University, Romania - PhD student, Faculty of Economy Science/Department: Economy, 'Lucian Blaga' ...
• Pages: 435-440

Performance and Risks in the European Economy

435

A New Risk Strategy for European Cooperative Banks

in Contemporary Economic Crisis

Constantinescu Liliana-Aurora

1

, Constantinescu Adrian

2

,

Dumitrescu Alexandra-Cristina

3

Abstract: The quality of the banking management and of the risk management represents the essential steps

for the insurance, the security and the s tability of each bank individually. In this article, the authors intends t o

underline the main aspects regarding the risk in sustainable development of European cr edit institutions and

the theoretical and practical aspects that can contribute t o increasing performance management in credit

institutions. In times of crisis, risk management in the banki ng system has a greater importance than in the

normal economic times. The 2011 was a year in which Romania has been hit by the repercussions of the

international economic crisis.

Keywords: risk management; risk administration; compound risk; crisis management team; c ommunication

during crisis.

JEL classification: G01; G21; G23; G32

1 Introduction

Risk management is an important component of the strategy of a credit institution to obtain a desired

level of profit while maintaining an acceptable risk exposure. In the domain of risk management a

credit institution guides itself by the operational legal provisions, resolutions, instructions and

regulations of the National Bank of Romania, standards, manuals, circulars, instructions, regulations

and by its own strategic objectives and rules.

Given the importance and complexity of risk management, in this process are involved all the

structures of a credit institution from the Annual General Meeting to each business division.

Risk management in 2011 was made part of the general objectives, so that levels of activity to be

mutually supported. This approach allows the credit institution to define and implement a risk

management strategy that starts from the top and it is integrated in its routine activities and operations.

The management personnel, regardless of its hierarchical level, will manage the activity on principles

of risk efficiency. Moreover, the staff as a whole will be trained to be aware of the importance of risk

management in achieving their own objectives.

One of the main objectives of the risk management process for 2012-2014 is to ensure a steady flow,

with a high quality and with increasing trends of the net revenue even while the international

1

Associate Pr ofessor, Ph.D., Faculty of Finance, banking and ac countancy/Department: Finance, banking and accountancy,

“Dimitrie Cantemir” Christian University, Romania, Address: 1 Paul Richter Str., Braov, Romania, Tel.: +40268-47 4789,

Corresponding author: lilianauroracon@yahoo.com.

2

PhD student, Faculty of Economy Science/Department: Economy, “Lucia n B laga” University, Romania, Address: 10

Victoriei B lvd., Sibiu 550024, Romania, Tel: + 40-(269) 21.60.62 / 207, 143, 131 , 308, Fax: +40-(269) 21.04.92, e-mail:

adicon85@yahoo.com.

3

PhD student, Faculty of Economy Science/Department: Economy, “Lucian Blaga” University, Romania, Address: 10

Victoriei B lvd., Sibiu 550024, Romania, Tel: + 40-(269) 21.60.62 / 207, 143, 131 , 308, Fax: +40-(269) 21.04.92, e-mail:

alexandra_d_c@yahoo.com.