Challenges for Banking Services in the Knowledge Economy

Authors

  • Shahrazad HADAD Bucharest University of Economic Studies

Abstract

In this paper, we have covered many of the roles that banks play in the financial system. Banks act as delegated monitors that ensure that economic agents allocate their resources effectively, thus leading to the sustainable development of entrepreneurship. Moreover, they also play an important role in sharing risks in the economy and protecting economic agents against market fluctuations through various means such as financial derivatives. These are the positive aspects of the roles of banks, but it should be noted that the way banks act to ensure an acceptable rate of return can cause fragility and instability throughout the financial system. In fact, banks are most often at the center of financial crises, as in the case of the global financial crisis that began in the summer of 2007. Banks may even contribute to spreading the negative effects of these financial crises because small shocks can have major effects on the financial system and economy. Banks also play an important role by facilitating the access of economic agents to financing and contributing to the development of the economy. In addition, they are important for good corporate governance, especially in countries such as Germany where bankers hold positions on the boards of private companies and can represent more shareholders in voting decisions.

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Published

2019-09-30

How to Cite

HADAD, S. (2019). Challenges for Banking Services in the Knowledge Economy. Management Dynamics in the Knowledge Economy, 7(3), 337–352. Retrieved from https://www.managementdynamics.ro/index.php/journal/article/view/326

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