Structural Shifts on Derivatives Markets at the Time of Increasing Digitalization and Post-pandemic Transformation of the Market

Abstract

AbstractThe increasing pressure of exogenous factors on the activities of mega-regulators at the time of the post-pandemic transformation of the market and changing monetary policy leads to lower profitability of deposits at commercial banks and at the same rises the yield curve of weighted average interest rates on interbank loans granted in euros, dollars, pounds and other currencies. The trading processes on the futures market are being intensively digitalized and so the post-pandemic transformation of the market is causing market players seeking to hedge risks to change their behavior. Changes that occurred on the debt capital market during the pandemic have increased investors’ interest in international derivatives market instruments and sped up the transformation of regional features of the derivatives market. These changes are mainly caused by the spread of the coronavirus infection and its impact on the global economy, which contributes to the development of digital technologies as instruments of interregional trade. International economic activity has been transformed by the opening and closing cycles of the economies of different countries, which affects the logistics and business processes of economic agents. The transformation of economic activity manifested in structural shifts occurring on the derivatives markets is confirmed by the changes in the dynamics of underlying assets of the derivatives market, such as stock indices, stocks, commodities, currencies, interest rates and ETFs. The analysis of the condition and specifics of the international derivatives market has revealed two problems worthy of independent research: 1) identifying major structural shifts in the international derivatives market that occurred during the pandemic; 2) evaluating the impact of the post-pandemic transformation of the market on the Russian derivatives market. The main parameters of the derivatives market, such as capitalization and trading activity, were determined in order to solve the indicated problems. The study of the dynamics of these indicators in the aggregate system of data of the international derivatives market allowed us to identify the main development trends on this market and assess the degree of influence of the pandemic on its main tools. The analysis of the regional characteristics of the international derivatives market made it possible to find out the main changes that took place on American, European, Asian, Middle Eastern and African exchange markets affected by growing digitalization. The data obtained made it possible to identify the place of the Russian derivatives market in the system of world economic relations on the derivatives markets during the period of post-pandemic transformation of the market and to compare the changes that took place in the Russian derivatives market with the trends of the international derivatives market. KeywordsDerivatives marketFutures contractsPost-pandemic transformation of the marketStructural shiftsDigitalization