Conceptual fundamentals of institutional development of world financial architecture

Abstract

The system theoretical generalization of the problems of modern functioning and transformation of world financial architecture within the framework of institutional paradigm is carried out in this paper. On this basis, the features of the institutional development of the global financial architecture as the most variable part of its institutional matrix, as well as scientific and practical recommendations for adapting the institutional structure of the financial system to the process of financial globalization are determined. According to the results of the investigation of the peculiarities of institutional development of the world financial architecture, it is found that institutional changes in the financial architecture are associated with changes in existing norms, rules, restrictions and mechanisms of their implementation, as well as changes in institutions. transformations of existing ones, mainly caused by crisis processes or the need to transfer certain powers to a single organization. Institutional development of financial architecture is a qualitative and quantitative structural changes in the financial system as a whole and its components related to the generation of institutional innovations, selection of effective institutions and their dissemination to reduce uncertainty, bad faith, transaction costs, information asymmetry. The equilibrium of financial architecture is substantiated as the state where the system-forming institutions remain relatively unchanged, and the dynamics of other institutional elements contributes to the creation of quality financial architecture. The institutional equilibrium of financial architecture is defined as its state in which system-forming institutions remain relatively unchanged, and the dynamics of other institutional elements contributes to the stability and efficiency of financial architecture, which ensures, first, stability of system-forming institutions costs, and, secondly, the dynamism of the «soft» elements of the institutional structure of the financial architecture contributes to its adaptability and, consequently, efficiency in the dynamic environment. It is the institutional development of financial architecture that creates the conditions for the growth of social progress, environmental stability and institutional efficiency.