Domestic Financial Market Research Articles

Overview of retail investment instruments of the Russian economy

Features of the current stage of development of Russia increase the relevance of studying problems associated with the expansion of internal sources of financing economic growth, one of which may be citizens’ savings. To attract private capital more widely, the national financial system can and should provide a large range of tools for private investors that meet the needs of citizens in terms of profitability and safety of funds. The paper has considered the key tools of retail investment, which are currently widely used in domestic practice. Alternative ways of private investment have also been explored. They can be applied depending on the needs of specific actors, market participants, or citizens. The development of a line of instruments for the retail investment – deposits, long-term individual investment accounts, products of research and production associations, insurance products, etc., their availability is one of the conditions for the effective functioning of the domestic financial market and, as a consequence, the Russian economy as a whole. The analysis of the essence, trends, opportunities, and risks of the retail investment instruments will allow us to assess the effectiveness of the activities of financial regulators in this area and identify promising and appropriate areas for its improvement.

DEVELOPMENT OF INVESTMENT FUNDS IN THE REPUBLIC OF SERBIA

The rapid development of the securities market laid the foundation for the development of investment funds, which were initially established in developed countries before later commencing operations in developing countries. The capital market and investment funds in the Republic of Serbia lag behind developed countries, so the impact of this sector on the development of the domestic economy is still not evident. The experiences of countries with developed financial market show that there is a decreasing market share for traditional intermediaries (such as banks) and as well growing trend in the representation of non-traditional intermediaries, primarily investment funds. However, in Central and Eastern European countries, the last two decades have been marked by increased interest from both experts and the scientific community in the operations of investment funds. Investment funds in the Republic of Serbia show potential after the Covid-19 pandemic, and the authors believe that their role in the domestic financial market is expected to improve in the future. In contemporary market economies, investment funds are rapidly evolving and becoming new, authentic financial intermediaries. Considering that investment funds represent long-term savings, more attention should be paid to raising public awareness and improving the level of financial literacy among citizens regarding the significance of investment funds for economic development in the domestic capital market. Considering mentioned, the first investment funds in the Republic of Serbia emerged only in 2007 and that they are not adequately represented in domestic literature, the authors aim to contribute to filling this gap with this work. In this context, the aim of the paper is to present the chronology of the development of investment funds (number, investment units, net asset value and investment structure) in the Republic of Serbia from 2007 to 2023.

PROCESS OF UKRAINE'S FINANCIAL SECTOR INSTUTIONALIZATION AND ROLE OF CORPORATE SECURITIES MARKET

This article deals with the characteristics of the institutionalization process of the financial sector in Ukraine and the role of the corporate securities market in it. It is determined that the modern domestic financial sector is characterized by significant institutional imbalances, primarily due to the insufficient effectiveness of state policy in this area. For many years, banks have been the key players in the domestic financial sector, which significantly reduced the level of financial inclusion. The development of non-banking financial institutions has been fragmentary, significantly undermining public trust in the financial sector. In particular, this concerns the activities of credit unions in Ukraine, where the market volumes of private pension provision have been minimal for a long time. Some existing institutional imbalances were overcome through the rapid digitalization of certain segments of the financial market, but the overall level of financial inclusion remains low. The process of institutionalization of the domestic financial market occurred against the background of the weakness of the corporate securities market. The article notes that this situation was a consequence of the lack of interest from joint-stock companies in market methods of capital attraction. Along with this, domestic financial institutions are not interested in investing in corporate securities. Thus, the reluctance of public corporations to place their securities on the market coincides with a peculiar investment strategy of financial institutions. As a result, the volumes of the primary corporate securities market in Ukraine are minimal (especially in the stock market), and government securities dominate the secondary market for a long time. This situation poses a series of threats to Ukraine's economic development and requires appropriate actions from the state aimed at the activation of the corporate securities market. It can now be stated that domestic public corporations are non-competitive in the global financial space, which destructively affects their market positions.

Status quo crisis again? RMB challenges and dollar hegemony

ABSTRACT Despite the slow process of RMB internationalisation over the last decade, we make an empirical argument that China has recently intensified the RMB’s international and domestic capacity to make it a formidable challenger to the dollar as a global currency in the medium and long-term range. We highlight that China has made substantial progress in expanding the RMB currency network and institutionalising a deep and open domestic financial market, the two most severe obstacles emphasised by the skeptics on RMB internationalisation. In developing this argument, we draw on the ‘credit theory’ of money and explain the global expansion of the RMB currency network in terms of the external and internal production of credit and debt relations denominated in the RMB across borders. Our empirical findings suggest that the pace of the growing foreign demand for RMB-denominated assets has recently taken off.

Current trends in bank lending in the Republic of Moldova

Bank lending represents the basic form of lending activity in the Republic of Moldova, as well as the core of the national lending system. It has the important function of contributing to the normal functioning of the financial system and contributing to the economic development of the country. The basic purpose of the conducted research was to determine the basic trends of the evolution of bank lending in the Republic of Moldova, as well as to highlight its qualitative transformation. For this, the official financial reports in the addressed field were examined, as well as the related information published in open sources of information. The carried out research demonstrated a certain continuous expansion of the lending activity of local banks. In the same way, during the last years there has been a certain qualitative transformation of it through the exploration of separate segments and niches of the market, the application of advanced digital technologies, as well as the continuous adaptation to the mobile conditions of the domestic financial market. The top commercial banks can be considered as the main promoters of the development of bank lending. The over-liquidity and pandemic crises, as well as the anti-crisis measures undertaken by the authorized public institutions, are the stimulating factors of the innovative process on the bank credit market. This article comes to present a complex picture of bank lending in the dynamics of the last decade.

Case Analysis and Future Expectations of Chinese Enterprises Suffering Heavy Losses in the International Futures Market: Take the Bank of China and Tsingshan LME as Examples

Affected by various factors such as COVID-19 epidemic and war, the world economic situation changes more frequently, which leads to increased instability in the international and domestic financial derivatives market. For the substantial changes in the international and domestic financial derivatives market, how to deal with sudden changes and analyze the failure cases in the change of financial derivatives is of far-reaching significance to the rapidly developing domestic financial derivatives market. By taking the Bank of China “crude oil treasure’ margin call liquidation case and Tsingshan LME Nickel Futures Squeeze Case as the core of the study, this paper uses case analysis method to deeply study the possible problems and failures in the futures market under the condition of financial derivatives market instability and puts forward suggestions on how to deal with these problems. This paper analyzes the attributes and characteristics of China’s ‘crude oil treasure’ products and nickel futures products, restores the event process, describes the impact of the event on investors, trading institutions and banks, and puts forward suggestions for improvement. The suggestions in this paper are as follows: First, the company and the regulatory department should strengthen risk supervision and management; Second, companies and investors should improve their professional capabilities.

Население как участник фондового и срочного рынков: ожидания, риски, перспективы

The relevance of the article is due to the fact that the instruments of the stock and futures markets are currently considered by the population as an attractive alternative to traditional investments in bank deposits. This category of inves-tors, which ten years ago did not have any noticeable weight on stock and fu-tures markets, is gradually turning into active participants in the securities market, capable not only of ensuring the efficiency of the Russian economy, but also of overcoming market risks. The subject of the study is the activity of retail investors in the domestic finan-cial market during the period of tightening anti—Russian sanctions. The pur-pose of the work is to consider the specifics of citizens' investment behavior, identify the main trends of the current period and factors contributing to the further development of the investor protection system and increase citizens' confidence in financial markets. The article identifies the peculiarities of the de-velopment of the retail segment of the domestic market in the period 2022–2023, and on this basis it is concluded that the sanctions regime has caused significant damage to the Russian financial market, however, the degree of im-pact of the negative processes constraining its development turned out to be less significant than predicted by most researchers. The continuation of the regulator's work in terms of developing additional measures to protect inves-tors' rights and improve financial culture, coupled with the implementation of initiatives by trade organizers and the professional community, will make it possible to counteract the spread of unfair trading and marketing practices, improve the investment climate in the country, and strengthen the confidence of private investors in financial market instruments and institutions.

РЕГУЛЮВАННЯ БАНКІВСЬКОЇ ДІЯЛЬНОСТІ В УКРАЇНІ У КРИЗОВІ ПЕРІОДИ

In a market economy, banks have extremely large opportunities to influence economic processes, which necessitates the regulation of their activities. The need to regulate banking activities is especially acute during the period of crisis in the country's economy, as banking activities are characterized by a much larger set of risks, which leads to its increased financial vulnerability. The modern banking system of Ukraine has been operating in a full-scale war for more than two years, which increases the number of risks and threats to the banking sector in particular and the Ukrainian economy as a whole. An effective banking regulation system is key to the normal and stable functioning of the banking system in such conditions, as well as to a rapid post-war recovery. Despite the considerable number of works devoted to the study of various aspects of banking regulation in Ukraine in the context of the financial crisis, it should be noted that the new realities and challenges within which the banking system operates today necessitate further comprehensive research of approaches to regulating banking activities in times of crisis in the domestic financial market. The purpose of the article is to clarify the practical features of banking regulation in Ukraine in times of crisis, and also to identify the key areas for its improvement in the context of significant uncertainty and volatility of the environment. The article defines the purpose and role of banking regulation in Ukraine in times of crisis. The legal framework regulating the activities of banks is studied. The key changes made to the regulatory framework by the National Bank of Ukraine during the crisis period are characterized. Practical approaches to the regulation of banking activities in Ukraine are characterized based on the analysis of the main indicators characterizing the state of development of the banking sector in the context of crisis turning points in the history of the formation of our country, namely: during the global financial crisis of 2008–2009, the local financial crisis of 2014–2016, the economic crisis of 2020–2021 and the current crisis conditions. The article also identifies the peculiarities of banking regulation in Ukraine in times of crisis. It is emphasized that the functioning of the Deposit Guarantee Fund in Ukraine has a significant impact on the stability of the financial system due to its ability to neutralize shocks and/ or consequences of crises by preventing panic of depositors and rapid withdrawal of insolvent financial institutions from the market. The key directions for improving the regulation of banking activities in the current conditions of high uncertainty are substantiated.

Регуляторное воздействие на финансовый рынок в условиях санкций недружественных государств

The subject of the study is the trends in the development and regulation of the financial market of the Russian Federation in order to achieve national economic development goals under the sanctions of unfriendly states. The purpose of the work is to determine the theoretical and legal foundations of the regulatory impact of sanctions on the financial market based on a comprehensive analysis of the opinions of leading scientists and practitioners, representatives of the Russian judicial system, and the legal experience of other states, to analyze the most and least effective mechanisms for legal regulation of processes occurring in various sectors of the domestic financial market, to substantiate proposals for solving existing problems in the field of financial market regulation both at the national and international levels. The article defines the essence of international economic sanctions. The consequences of their introduction have been revealed. The ways of increasing the efficiency of digitalization of the financial market are substantiated. The most optimal way of forming the unified payment space of the EEC and the CIS has been determined as one of the directions for achieving the national development goals of the Russian Federation in the field of digital transformation. Conclusions are drawn that at present there is a need to correct the current banking legislation, as well as to establish new areas of interaction with countries that continue mutually beneficial economic cooperation with the Russian Federation within the framework of interstate integration associations.

PROFIT MANAGEMENT ASPECTS OF UKRAINIAN BANKS IN FINANCIAL UNCERTAINTY

In this article, we single out the main characteristics of the bank's profit and examine its constitutive elements as well as its sources of formation. It’s pointed out that profit management plays a key role if a bank is to operate successfully. We also suggest our definition of profit management in banking, its purpose, and its main objectives . The article provides a detailed analysis of the financial performance of Ukrainian banks in 2020-2022 and identifies the main factors that negatively affected the amount of profit in 2022. The main factor behind the decline in the profitability of domestic banks was a significant increase in provisions for losses incurred and expected because of the war. Despite the hardships of the war, the banking sector remains operationally efficient and continues to be profitable. The article states that under the current circumstances, it is rather difficult for banks to increase their activities, so the main factor in a bank’s profitability is cost reduction. However, the results of the analysis showed that in 2020-2022, revenues consistently exceeded expenses and during this period we noticed steady growth in bank revenues. The article analyzes the main indicators of profitability of the banking sector of Ukraine in 2020-2022. The main trends that have occurred over the past three years in the domestic financial market have both directly and indirectly affected the financial results of the Ukrainian banking system.

Evaluating the impact of uncertainty and risk on the operational efficiency of credit business of commercial banks in China based on dynamic network DEA and Malmquist Index Model

There's a lot of uncertainty in the global financial system due to trade, political, and unforeseen issues. There are dangers and uncertainties in China's domestic financial market due to the ongoing effect of the global economic climate and the impact of the new coronavirus pandemic. Nonetheless, the conventional financial sector, which is controlled by commercial banks, continues to have a dominant position in China's financial system, with the traditional credit business model serving as its primary business model. As a result, the primary subject of this essay is commercial banks, a common kind of financial organization. The combination of the Malmquist Index Model with the new network DEA model takes into account the real circumstances faced by Chinese commercial banks. The three phases of the credit business operation process of commercial banks are capital buildup, loan issuing, and profit generation. To observe the effects of recent domestic market uncertainties and the high risk of emergencies like the epidemic on traditional financial institutions dominated by banks, this paper measures the efficiency of credit business of 26 listed banks in China from 2016 to 2022 and analyzes the operational efficiency of credit business of Chinese commercial banks from both static and dynamic perspectives. As a result, Chinese commercial banks and other established financial institutions are better equipped to reduce risks and uncertainties and support the steady growth of the country's financial sector.

Аналіз сучасних інструментів інвестування у відновлювальну енергетику України

This article examines the investment tools within the renewable energy sector in Ukraine. As the world struggles with climate change, the transition to sustainable energy sources has become a global goal. Ukraine, in its pursuit of a greener and more environmentally responsible future, has seen the growth of its renewable energy sector. However, this growth has met challenges, demand-ing the development of strategic solutions. Companies operating in the renewable energy market are now increasingly aware of their social mission in contributing to the achievement of sustainable development goals. The transformation of the energy landscape reveals the necessity of collabora-tion between various stakeholders, including governments, local authorities, banks, investment funds, and households, whose role is critical in financing renewable energy projects. As financial markets evolve and concepts of ownership adapt to the changing landscape, a need to create inno-vative investment instruments tailored to the unique demands of the renewable energy sector emerges. This enables participants in the financing process to access a wide array of investment op-tions. Among these options, "green bonds" have become a particularly effective instrument for fi-nancing renewable energy projects. The study discussed in the article highlights the numerous ad-vantages associated with “green bonds”. These advantages include legislative provisions ensuring the targeted utilization of funds raised through green bonds and their high liquidity in developed fi-nancial markets. However, for the widespread implementation of “green bonds” in financing re-newable energy projects in Ukraine, a series of legislative and organizational improvements is cru-cial. These improvements should encompass both changes in legislation and the development of the domestic financial market. Overcoming these barriers is essential for bringing Ukraine closer to the successful achievement of its sustainable development goals. This transition to sustainable ener-gy not only contributes to the global climate change mitigation but also positions Ukraine as a re-sponsible and forward-thinking player in the international effort to create a more sustainable and environmentally conscious future.

The role of the Bank of Russia in regulating the financial market in the context of sanctions policy

The article analyzes the current state of the financial market as one of the most important elements of the financial system. The ways and possibilities of further development of the financial market in the conditions of the strict sanctions policy of many states in relation to the Russian Federation have been studied. The article indicates the ways of further improvement of the financial market as one of the most important institutions that ensure national and economic security. It is noted that a large role in the regulation of the financial market is assigned to the Central Bank of the Russian Federation as a mega-regulator of financial markets. The paper also identifies certain segments of the financial market that are of paramount importance for the state and require modernization to the greatest extent, and which, according to the state’s plan, will contribute to ensuring a decent standard of living for the population. The main techniques and methods of regulation in the financial market are analyzed and it is concluded that in order to achieve the development of the main institutions of the financial market, it is necessary to ensure the economic security of the subjects of the domestic financial market, which is an urgent task of the state.

Управління фінансуванням державного бюджету в аспекті співпраці України з МВФ

Introduction. During the war, the tasks of implementing new approaches to managing operations involving the attraction and use of resources within the framework of state budget financing arose. At the same time, the risks of maintaining financial stability and debt sustainability intensified. The resolution of these issues became the subject of cooperation between the state administration bodies of Ukraine and the IMF. Problem Statement. The gaps between the growing expenses of the state budget and their revenue coverage have increased. The result was an increase in the burden on the financing of the state budget, which required making significant changes to the sources of attracting funds and the mechanisms for their implementation. Purpose. Conducting an analysis of changes in the management of the state budget financing of Ukraine during the war in the aspect of Ukraine's cooperation with the IMF. Methods. An analysis of state budget financing during the war and overcoming its consequences was carried out. The main tasks, sources and mechanisms of state budget financing are revealed. The problems of resource attraction from the domestic financial market, as well as financing from external sources, are highlighted. Results. At the initial stage of the war, budget expenditures were significantly increased and changes were made to their structure. At the same time, deficit indicators increased, and its coverage was provided by budget financing operations. Due to the high risks of increasing the non-debt resource (on the basis of privatization and active operations), there arose a need of increasing state borrowing. During the use of internal resources, monetary financing was allowed, which had a negative impact on the dynamics of macroeconomic indicators. External debt obligations are provided on preferential terms and have a long-term nature. The use of such financing made it possible to ensure macroeconomic and financial stability in Ukraine, but was accompanied by an increase in public debt indicators. It is noted that the allocation of domestic state borrowing needs to be reviewed, and external financial assistance is subject to changes in the direction of rationalization and replacement by internal financing. Conclusions. Measures developed within the framework of cooperation between Ukraine and the IMF allow to ensure budgetary capacity and debt sustainability. In order to strengthen them, it is proposed to increase the volume of non-debt resources for financing the budget, to replace monetary financing with non-state sources of its provision, to adopt programs for the gradual restoration of fiscal rules, as well as access to international capital markets, to make changes to the attraction of financial assistance (gradual replacement of it by other sources), adjusting the strategic principles of public debt management, taking into account the effects of the war and the needs of post-war recovery.

Activities of banks on the DGB market

The article focuses attention on the study of securities placed exclusively on domestic capital markets and highlights the role and importance of banks in this case First, the work analyzed the essence of the functioning of domestic government bonds. DGB belongs to debt securities that are sold to primary dealers and their clients on the primary market to finance the needs of the state budget. The work specifies the requirements for banks that can be primary dealers and the rating of domestic banks-primary dealers. A survey of domestic government bonds market was carried out, which are in circulation at nominal and amortized cost by owners, and it was found that during the last 5 years, banks occupied one of the leading places in the structure of their owners. It was revealed that the share of DGB in the total assets of domestic banking institutions is at a sufficiently high level, which is due to the significant reliability of these securities. The activities of securities traders - banks with the largest volume of completed and concluded exchange contracts with the DGB on the stock and over-the-counter markets in 2020 - are highlighted, and the banks that occupy the leading positions according to the indicated indicators are identified. However, the war introduced changes оn the activity of the domestic financial market, which were reflected in the activities of banking institutions and the functioning of the DGB, in particular, auctions for the sale of military bonds were launched.

Research on the Role of RMB-denominated Oil Trade in Promoting RMB Internationalisation

With the development of the global economy and the continuous expansion of international trade, currency internationalization has become an important goal of monetary policies of various countries. In this context, China has become the second largest economy in the world, and promoting the internationalization of the RMB has become one of the urgent issues for the Chinese government to address. In recent years, the internationalization of RMB has achieved remarkable results, but the use of RMB is still limited in the international commodity market, especially in the oil market. This paper takes the RMB-denominated oil trade as an entry point to analyze its contribution to the internationalization of the RMB and its potential impact. The paper first explains the importance of oil trade to the global economy and analyzes the current situation of the oil market with the US dollar as the main settlement currency. As one of the most important energy sources in the world, oil occupies a pivotal position in international trade. However, for a long time, the pricing and settlement of the oil market has relied mainly on the U.S. dollar, which gives the U.S. dollar a significant dominant position in the global arena and also exposes other countries to the risks associated with exchange rate fluctuations in oil trade. Second, this paper analyzes theoretically and empirically the role of RMB-denominated oil trade in promoting RMB internationalization. Theoretically, RMB-denominated oil trade will help increase the demand for RMB in the international market, reduce exchange rate risk, and thus accelerate the process of RMB internationalization. The empirical analysis shows that in recent years, with the growing volume of China's oil imports and the advancement of RMB internationalization, RMB-denominated oil trade has achieved initial results, and some countries have started to adopt RMB for oil settlement. Then, the paper discusses the challenges faced by RMB-denominated oil trade and the policy measures that the Chinese government should take. In the current international financial system, the U.S. dollar is "entrenched" as an international currency, and it is not easy to realize RMB-denominated oil trade. The Chinese government should strive to improve the credibility and convertibility of the RMB, actively participate in international oil market rule-making, strengthen cooperation with major oil producing and marketing countries, and promote domestic financial market reform to create a favorable external environment for RMB-denominated oil trade. Finally, the paper concludes that RMB-denominated oil trade is important for RMB internationalization. By realizing RMB-denominated oil trade, it is expected to improve the position of RMB in the international market and create favorable conditions for RMB internationalization. At the same time, it will help promote global currency diversification, reduce the sensitivity of China's economy to external shocks, and achieve more stable and sustainable economic development.

FORECASTING OF THE MAIN SEGMENTS OF THE FINANCIAL MARKET OF UKRAINE

The article analyzes and builds economic and mathematical models for forecasting the main segments of the financial market of Ukraine:: the banking market; stock market; insurance market. The role of the financial market in modern civilized society is huge. Its functions include the mobilization of capital, its distribution among industries, control and support of the reproductive process, as well as increasing the efficiency of the economic system as a whole. The turning point for the Ukrainian financial market was 2022, namely the beginning of a full-scale Russian invasion, which led to the isolation of the financial market of Ukraine due to the introduction of martial law. In order to identify the key challenges for the development of the financial market, it is necessary to forecast the dynamics of its main segments using the tools of economic and mathematical modeling. A feature of the development of the domestic financial market is that the main part of the state’s financial resources is concentrated in such subjects of the financial system as deposit (commercial) banks; non-deposit financial intermediaries (insurance companies); subsidiary financial corporations (stock exchanges). According to the constructed forecasting models, it can be concluded that, all things being equal, in 2023 and 2024, the tendency to decrease the number of operating banks will continue and will be 59 and 54, respectively. As for the share of commercial banks with domestic capital, it will remain at the same level in 2023 and decrease by 4% in 2024. The number of insurance companies will decrease to 111 in 2023 and increase by 8 in 2024. Regarding the size of their assets, in 2023 there will be a decrease to the level of UAH 68,557 million, and a slight increase to the level of UAH 69,283 million in 2024. The share of the exchange market in the total volume of trades on the securities market will increase to 62% in 2022 and to 66% in 2023.

Bangkit Lebih Cepat: Melalui Program Pendampingan SDM dan Perencanaan Usaha Dengan Memanfaatkan Aplikasi Marketplace di Masa Pasca Pandemi Covid-19 pada Toko Sembako “Winda Jaya” Surabaya

As a result of the Covid-19 pandemic that hit Indonesia in 2020, it has resulted in a decline in the economy and activities in various sectors and regions of Indonesia. In 2023, the economic condition, which was in shock due to the Covid-19 pandemic, is gradually improving in line with the stability of the domestic financial market and the stretching of several economic sectors. The Government of Indonesia has declared that this year our economy must recover more quickly by making policy steps to strengthen the economy accompanied by transparent prioritization and proper policy coordination and synchronization. The community service team at the Faculty of Economics and Business, Surabaya University of Technology feels compelled to participate in the success of government programs by creating HR assistance programs and business planning by utilizing marketplace applications in the post-Covid-19 pandemic for business development and increasing sales turnover. The accompanying partner this time is the "Winda Jaya" Surabaya staple food shop, which sells various basic household needs such as rice, sugar, coffee and others. The community service team at the Faculty of Economics and Business tries to identify problems based on the collected data. After further analysis, the community service team formulated the problem as follows: (1) Lack of partner's understanding of management functions and how to manage HR, (2) Lack of partner's understanding of making good business plans, (3) Partner's lack of understanding about tips and tricks for successfully utilizing marketplace applications. The method used is divided into 3 (three) stages, namely the preparation stage, the activity implementation stage and the closing stage. The results of this community service activity are an increase in understanding by companion partners of management science material, procedures for managing human resources, making a good business plan and how to use marketplace applications for business development. This community service activity (PkM) is in the framework of implementing the Tridharma of Higher Education and also supports the Surabaya City Development Synergy Program

INSTITUTIONAL AND SEGMENTAL ASPECTS OF UKRAINE’S FINANCIAL MARKET DIGITALIZATION

The article deals with the development analysis of certain segments of Ukraine’s financial market in the context of digitalization processes. The positions of modern foreign and domestic scientists regarding the digitalization impact on economic and financial relations are outlined. The key disproportions of the financial market at the institutional and segmental levels are highlighted. In particular, at the institutional level – the long-term and unchallenged dominance of banks over non-banking financial institutions; absence or minimal development of certain types of financial institutions; weakness of stock exchanges and exchange infrastructure in general; low level of financial inclusion. At the segmental level – imbalances in the lending market development, insufficient volume of the corporate securities market; weakness of leasing lending segments, factoring services, etc. It is argued that in the post-war reconstruction of Ukraine, the financial market should become an effective mechanism for the distribution of capital, therefore it is important to conceptually change the emphasis in its development on the digital technologies basis. It has been established that nowadays, the participants of various segments of the financial market are adapting their own strategies to the digital economy’s requirements. However, the degree of such adaptation and digitization level of certain segments of the financial market of Ukraine differ significantly. These disparities largely determine the strategic prospects of various segments of the domestic financial market. A similar conclusion was made regarding the digitalization strategy of financial institutions in Ukraine. For many financial institutions, the digitization of operations has become one of the important competitive advantages, but there are other approaches – in particular, in terms of digital technologies’ use for unfair competition and systemic violations of the rights of investors and consumers of financial services.

Optimum financial areas: Retooling the governance of global finance

AbstractThis article analyses the political economy of financial stability under conditions of deep cross‐border market integration, adapting the ‘joint products’ approach of Broz among others. Many argue that financial stability is a public good; we propose that it is inherently excludable and that particular conditions must obtain to ensure it is non‐diminishable for all. The difficulties of providing financial stability arise because of the ‘club goods’ nature of monetary and financial systems. We then propose six institutional preconditions that can stabilise a financial market that is integrated across multiple regulatory jurisdictions. We use case studies of Great Britain, the US and Canada to show how national governments have dealt with these political economy dilemmas to stumble towards similar arrangements to stabilise domestic financial market integration. Three criteria relate to the ‘technical substructure’ of markets, while three others focus on macro‐prudential considerations. Together they constitute necessary and sufficient conditions for the provision of financial stability. These criteria generate political economy obstacles both individually and as an interdependent package but can mitigate the costly dynamics of financial market disintegration in times of crisis. We argue that these criteria can be applied across national boundaries as well as across regulatory jurisdictions within them.