Financial products as alternatives to traditional deposits

Abstract

Economic and financial environment characterized by risks and uncertainties greatly influences the decision depositors as consumers of banking products. Often, the disadvantages of traditional deposits are the reasons that lead depositors to look for dangerous financial products that can provide the preservation of the purchasing power of the currency, the currency hedging, but assuming unknown additional risks due to the lack of information. In this context, increasing the safety of depositors appears as an undisputed necessity, which translates to our approach in the development of a constructive type applied research that takes into account the following stages: short description of risks and uncertainties characterizing the economic environment with emphasis on the importance of the financial instruments; analysis of empirical data on deposits in lei and euro at national level, identifying possible causes which led to one preference or another and finding the causes underlying the different options manifested in the capital, as compared to other counties; identifying the products that offer a dangerous alternative to traditional deposits from the Romanian banking market and describing these products and their related risks; the proposal of a new product, demonstrating its effectiveness by testing and confirmation of two hypotheses.