Financial architecture: main components, comparative analysis, and current challenges

Abstract

The concept of financial architecture describes the structure and mechanisms by which financial resources and capital move in the economy. The financial architecture includes various financial instruments and markets, legislation and regulatory authorities, and international financial institutions. The main objective of the financial architecture is to ensure the stability and efficiency of the financial system, as well as access to capital and financial services for all sectors of the economy. To achieve these goals, the financial architecture requires constant modernization and adaptation to changes in the global economy and financial industry. The article considers the key components of the financial architecture, such as the banking system, stock market, and regulatory framework, as well as their interaction and impact on economic performance. The challenges and opportunities associated with financial architecture (the effects of technology and globalization) on financial systems, the role of politics, and others are explored. The financial architecture of Ukraine is considered, as well as the main characteristics of the financial architecture of different countries, including the United States, China, Japan, the European Union, Brazil, and India. Information is provided on the studied countries' financial sector and financial stability. The study of the financial architecture in different countries allows for comparing different approaches and understanding how they affect the state of the economy and financial stability. Since the financial system is constantly changing under the influence of technological progress, unstable economic conditions, and regulatory reforms, we believe it is advisable to identify current trends in the financial system: digital transformation, fintech innovations, regulatory reform, sustainable finance, cross-border integration, a brief description of which is provided in the article. The study's results may be helpful to economists, finance, and investment professionals, as well as anyone interested in the economic system in general and the financial system. Keywords: financial architecture, banking system, stock markets, digital innovations.