Study Data from Ovidius University of Constanta Provide New Insights into Risk Management (Volatility Spillovers Between the U.S. and Romanian Markets: The BET-SFT-500 Dynamic Under Political Uncertainty): Insurance – Risk Management

CDC & FDA Daily

2025 SEP 05 (NewsRx) -- By a News Reporter-Staff News Editor at CDC & FDA Daily -- Research findings on risk management are discussed in a new report. According to news reporting out of Constanta, Romania, by NewsRx editors, research stated, “This paper analyzes the volatility relationship between the Romanian BET index and the U.S. SFT-500 index during the period 2019-2024, with a particular focus on the impact of political and geopolitical shocks.”

Funders for this research include Bucharest University of Economic Studies.

Our news reporters obtained a quote from the research from Ovidius University of Constanta: “The study investigates whether financial markets in emerging economies react symmetrically or asymmetrically to external shocks originating from mature markets, especially during periods of political uncertainty. The research period includes four major systemic events: the COVID-19 pandemic, the military conflict in Ukraine, the 2024 U.S. presidential elections, and the 2024 Romanian elections, all of which generated significant volatility in global markets. The methodological approach combines time series econometrics with the Impulse Indicator Saturation (IIS) technique to identify structural breaks and outliers, without imposing exogenous assumptions about the timing of events. The econometric model includes autoregressive and lagged exogenous variables to estimate the influence of the SFT-500 index on the BET index, while IIS variables capture unanticipated political and economic shocks. Additionally, a Fractionally Integrated GARCH (FIGARCH) specification is applied to model the persistence of volatility over time, capturing the long-memory behavior often observed in emerging markets like Romania. The results confirm a statistically significant but partial synchronization between the two markets, with lagged and contemporaneous effects from the SFT-500 index on the BET index. Volatility in Romania is markedly higher and longer-lasting during domestic political episodes, confirming that local factors are a primary source of market instability.”

According to the news editors, the research concluded: “For investors, this underscores the need to embed political risk metrics into emerging market portfolios. For policymakers, it highlights how stronger institutions and transparent governance can dampen election- and crisis-related turbulence.”

For more information on this research see: Volatility Spillovers Between the U.S. and Romanian Markets: The BET-SFT-500 Dynamic Under Political Uncertainty. Risks, 2025,13(8):150. (Risks - http://www.mdpi.com/journal/risks). The publisher for Risks is MDPI AG.

A free version of this journal article is available at https://doi.org/10.3390/risks13080150.

Our news journalists report that more information may be obtained by contacting Kamer-Ainur Aivaz, Department of General Economy, Faculty of Economic Sciences, Ovidius University of Constanta, 900470 Constanta, Romania. Additional authors for this research include Lavinia Mastac, Dorin Jula, Diane Paula Corina Vancea, Cristina Duhnea, Elena Condrea.

(Our reports deliver fact-based news of research and discoveries from around the world.)