Abstract
Financial security of the country means the absence of threats to the financial system, ensuring the stability and development of the financial system and the ability to maintain the financial sovereignty of the state. The aim of the article is to evaluate financial security in EU countries. The aggregate financial security index (AFSI) is used to reach this goal. AFSI calculation is based on five sub-indexes: Human Development Index, Economic Globalisation Index, Financial Development Index, Index of Economic Freedom and Country Level Index of Financial Stress. The results show that Market-based EU countries have the highest financial security. The lowest financial security was set in Eastern European countries.
Highlights
Relevance of the articleThe financial security of the country creates favourable conditions for the development of the financial system and financial stability
The aggregate financial security index presented in this investigation integrates key aspects of financial security and provides an opportunity to assess the financial security of the country
The results showed that the crisis in 2007–2008 had a negative impact on Ukraine’s financial security for external factors that decreased the country’s financial stability
Summary
The financial security of the country creates favourable conditions for the development of the financial system and financial stability. Financial security has impact on the country’s attractiveness for investment and economic growth and promotes sustainable business development. Growing financial security helps prevent crisis and in crisis situations, it helps to manage threats to the financial system and restore lost stability. The financial crisis in 2007–2008 had a major impact on increased interest in financial security. The coronavirus pandemic in 2020 created new assumptions for the country’s financial security empirical research which led to the creation of an aggregated financial security index. The aggregate financial security index presented in this investigation integrates key aspects of financial security and provides an opportunity to assess the financial security of the country.
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