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Article: Estimation of interest rate in Romanian credit unions.(Report)
- Article from:
- Journal of International Finance and Economics
- Article date:
- January 1, 2009
- Author:
CopyrightCOPYRIGHT 2009 International Academy of Business and Economics. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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1. INTRODUCTION
The interest, one of the most important components of the financial-banking system with a deep implication in the sequence of market economy mechanisms represents an absolutely indispensable condition for the opportunity and efficiency of granting a credit. Interest rate risk has been fundamental to the business of banking from the very beginning, and in most banks is the prime focus of attention for the asset and liability management process (ALM) and its supervisory committee (ALCO). It is classical two-way (or 'speculative') risk, commonly defined as "exposure to loss (or gain) caused by changes in interest rates" (E.Cade, 1999). As a ...