Financial Illusions During Transition: Case of Romania
The Tenth International & Interdisciplinary Scientific Conference,Vanguard Scientific Instruments in Management, Ravda, Bulgaria, September 13-17, 2017
14 Pages Posted: 4 Jan 2018
Date Written: September 08, 2017
Sometimes, the promoters of the financial products that promise high abnormal returns succeed in hiding the substantial risks associated. Such financial illusions have some particularities in countries that experience the transition to the market economy, where the financial systems are fragile. In this paper we approach some types of financial illusions experienced in Romania between 1990 and 2000: fraudulent banks, “mutual-aid games”, rudimentary mutual funds and popular banks. We conclude that they were favored by circumstances such as the monetary disequilibrium, the delayed privatization of the banking sector, the financial knowledge lack among the population, the financial legislation deficiencies and the political corruption.
Keywords: Financial frauds, Transition, Political corruption
JEL Classification: G41, O17, P37
Suggested Citation: Suggested Citation