The need for strategic management within the Romanian banking sector

Abstract

The functions of the banking sector must be highlighted by ensuring the smooth operation of the instruments governing the monetary mechanism. In fact, it should help to facilitate the flow of financial flows underlying any economic activity. The paper addresses the necessity of management in the banking sector, setting out the main directions in which banks should act in order to achieve an efficient management. The improvement of banking legislation, the quality of each management segment, the tools used, the policies and the strategies implemented, are decisive factors in the development of the banking sector. With the evolution of the banking industry the attention of credit institution mangers started to move from profit and maturity analysis to risk mitigation that takes into account both the profits and risks involved in banking activities. The relevant question being asked in the present is if the strategy applied by bank pursues profit-risk duality. Analysis option is oriented to practice by highlighting the theoretical aspects in explaining the priority strategic objectives in banking, the impact of banking risks on bank performance. Theoretical methods, represented by the theoretical and applicative approach, are explained in the explanation of the economic problems related to risk and banking performance.