Banking Financial Intermediation and Value Creation

Abstract

In our present paper, it’s a question for us to answer the problematic relating to the strategic process pursued by the bank in its search for added value, taking into consideration the specificity of its financial intermediation activity which submits this value to the impact of a set of constraints that can degrade, or even slow down the creation of banking value added. So, our intention is to carefully address the evolution of financial intermediation in the time under the main forces of the financial system. It’s a battle of analysis based on a good synthetic state of the art that puts the creation of banking value as a major priority, taking into consideration the unavoidable and necessary components in all the planned strategies within the banking institution and which present the main factors and sources of added banking value. The ways of searching the added banking value are diverse and its factors are varied, but they all converge in the bank's ability to manage the risks generated by its activity, especially those of a financial nature. Our theoretical model is based on this context, in which we formulate five hypotheses concerning the unfavorable impact of the expenses generated by financial risks on the value added of banks.We choose, then, the NBI (Net Banking Income) as an approximate measure of banking value added.

Keywords : Financial Intermediation, Bank, Value Creation, Financial Risk Management, Net Banking Income

JEL Classification : G21

Paper type : Theoretical Research