Financial Regulatory Bodies Research Articles

Christian Ethical Response to The Challenges of Digital Financial Borrowing in Nigeria

Digital financial borrowing is the money borrowed online through digital mobile applications, platforms or phones that are offered by financial lenders using the Internet. Due to the advancement in financial technology, banking and financial services and operations have been digitalized. The emergence of digital finance has rebranded banking and financial borrowing access and opportunities. People can now borrow money online, digitally and seamlessly. This development is applaudable because it eases traditional banking operations burdens and removes bottlenecks in borrowing and lending to finance business and personal needs. However, the attendant experiences from digital financial borrowing are worrisome and pose challenges to human well-being in developing economies, especially among Christians in Nigeria. Some of the experiences of digital financial borrowers are poor loan repayment, which may be due to high interest, breach of personal data policy and social shaming of defaulted borrowers by lending companies’ employees. The unvirtuous motives and characters of some borrowers, professionally unethical attitudes and loan recovery strategies are responsible for these challenges. This paper gives an overview of digital financial borrowing in Nigeria and discusses digital financial borrowing, which is characterized with features such as instant, automation, remote, consumer loans and short maturity. The paper argues that digital financial borrowing has assisted financial inclusion and contributed to Nigeria’s digital economy, it has however negatively impacted on borrowers’ personal, emotional, mental, marital, business, spiritual and moral well-being due to poor repayment or inability to repay, high interest, and social shaming of customers by digital loan officers. The paper concludes that Christians should act virtuously and ethically according to biblical instructions when dealing in financial borrowing, wisdom, honesty, godliness, discretion, patience and mutual respect are among Christian virtues to display in financial borrowing decisions, actions and relationships. It recommends that churches and church leaders should encourage financial education and literacy that enhance credit understanding and boost Christians’ financial wellness. It also recommends that Chartered Institute of Bankers of Nigeria, with other financial regulatory bodies in Nigeria should regulate the operations of lending companies and enforce acceptable professional work ethics and attitudes of digital lending companies’ employees to enhance friendly relationships with customers.

Modelling the Behaviour of Millennials towards the Adoption of Mobile E-Money Services in National Capital Region of the Philippines using Structural Equation Modelling

This study investigates the behavioural intention of millennials towards the adoption of mobile e-money services. The Theory of Planned Behaviour as the theoretical foundation with Attitude, Subjective Norms, and Perceived Behavioural Control variables and Structural Equation Modelling as the modelling technique were employed to identify what factor(s) influence the millennial’s behavioural intent. A combined online and paper-and-pencil survey form was employed to assess how electronic banking through the use of mobile e-wallets is perceived by the millennials residing in the National Capital Region of the Philippines. The sociodemographic profile of the respondents and their banking experiences, including their access to financial products and services, are other goals of this study. The research concludes that millennials’ attitude and perceived behavioural control have a significant impact on their intent to adopt mobile e-money services, and the majority have access to financial products and services. The millennials’ subjective norms have a positive effect, but it is not significant. Additionally, the respondents’ gender and whether they own a bank account or not were used for moderation analysis. The research findings showed that both variables do not have a significant effect on the links between variables. Results of this research could guide the financial regulatory bodies in their policy-making activities, the users of electronic financial products in their financial endeavours, and the government, ultimately, to achieve its financial goals.

Impact of a new regulatory policy on thematic and monthly distribution funds in Japan

The Japan Financial Services Agency (JFSA), the country’s financial regulatory body, is concerned with business conduct surrounding mutual fund sales in Japan, especially regarding thematic and monthly distribution funds. The agency introduced a new regulatory policy in 2015 to encourage competition to provide high-quality, customer-oriented financial products and services. Unlike traditional regulation, this policy is based on the comply-or-explain approach, which does not mandate compliance. We utilize a difference-in-differences (DID) approach to examine whether this policy induces changes in the behavior of fund distributors regarding the promotion of these funds. We find that the effectiveness of the policy is not uniform. The policy has a limited impact on reducing fund flows and the size of thematic and monthly distribution funds among active funds, which include equity, bond, and balanced funds. By contrast, we find some evidence that the policy has reduced the fund flows and the size of equity thematic and monthly distribution funds relative to low-cost equity index funds. We find that the comply-or-explain approach alone may not suffice to regulate these fund sales, as distributors and managers can pursue their own interests. In addition, the effectiveness of the approach also depends on investors’ behavior, which may be hindered by a lack of sophistication in understanding the characteristics of these funds.

A REVIEW OF U.S. FINANCIAL REPORTING SCANDALS AND THEIR ECONOMIC REPERCUSSIONS: INVESTIGATING THEIR BROADER IMPACT AND PREVENTATIVE MEASURES

This study provides a comprehensive analysis of financial reporting scandals in the United States, focusing on their evolution, impacts, and the effectiveness of preventative strategies. The primary objective was to understand the historical development of financial reporting, identify the mechanisms of financial scandals, assess their economic and social repercussions, and evaluate the regulatory and technological responses implemented to prevent such occurrences. Employing a systematic literature review and content analysis, the study analyzed data from academic journals, government publications, and reports from financial regulatory bodies, with a focus on literature published between 2010 and 2023. The key findings reveal that financial reporting scandals have significantly influenced corporate governance and financial regulation, leading to substantial economic and social impacts, including loss of investor trust and market instability. Preventative strategies, notably legislative reforms such as the Sarbanes-Oxley and Dodd-Frank Acts, have been instrumental in enhancing transparency and accountability in financial reporting. Technological innovations have also emerged as vital tools in detecting and preventing financial irregularities. The study concludes that building a resilient financial reporting landscape requires continuous adaptation to technological advancements, development of sophisticated risk management tools, and fostering a culture of ethical reporting. Policymakers and industry leaders are urged to focus on creating balanced legal frameworks that encourage transparency and protect against financial malpractices, thereby ensuring a financial reporting environment that is transparent, accountable, and resilient against future challenges.
 Keywords: Financial Reporting Scandals, Corporate Governance, Regulatory Reforms, Preventative Strategies.

Effect of Ownership Concentration on Agency Cost of Industrial Firms Listed on the Nigerian Exchange Group

This study investigated the effect ownership concentration on agency cost of industrial firms listed on the Nigerian exchange group. The specific objectives were to examine the effect of government ownership, managerial ownership, institutional ownership and foreign ownership affects agency cost of firms listed on the Nigerian exchange group. Panel Least Squared (PLS) method of data analysis was used. Secondary sources of data were employed; the interested variables were sourced from the annual report of the quoted industrial firms. The variables were assets utilization as the dependent variables while government ownership, managerial ownership, institutional ownership and block ownership were the independent variable. The study employs descriptive statistics, correlation and regression analysis in the analysis. From the analysis result the study found that. Government ownership has no significant impact on agency cost of firms listed on the Nigerian exchange group (t-test 1.539283, p=0.1286). Managerial ownership has significant impact on agency cost of firms listed on the Nigerian exchange group (t-test 4.541870, p=0.0000). Institutional ownership has significant impact on agency cost of firms listed on the Nigerian exchange group (t-test -3.443344, p=0.0005). Foreign ownership has negative and insignificant effect on agency cost of firms listed on the Nigeria exchange group (t-test -0.336863, P= 0.7372). The researcher recommends that. Government ownership of sensitive firms should be minimized, as such ownership are usually inefficient and characterized by bureaucratic bottlenecks, which do not have clear incentives to improve asset. The study recommends that financial regulatory bodies in Nigeria such as the Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation (NDIC), and Securities and Exchange Commission (SEC) should ensure that a reasonable degree of managerial ownership is maintained by all banks due to its potential ben

Insider Trading Recognition among the Stakeholders of Bangladesh and Adequacy of the Regulations

Purpose- As an emergent economy Bangladesh is trying to develop a capital market, but the share prices in Bangladesh are widely believed to be artificially designed and manipulated. It is necessary to get back the public confidence back in the market. Without analyzing the factual scenario would not be feasible. This study tries to empirically ascertain the allegations regarding insider trading in Bangladesh.Design/methodology/approach– This isexploratory research with a limited focus on quantitative analysis. It analyses the primary data collected through structured questionnaires from four groups of stakeholders (board members, top-level employees, stock dealers, and investors) for description and relationship. Findings– Although a significant proportion of the respondents are aware of insider trading, 1they feel their knowledge about insider trading is not adequate to detect or prevent it from happening through an employee (insider) code of conduct. Also, the respondents think that the rules preventing insider trading in Bangladesh are not adequate. According to their opinion companies are not taking sufficient measures to prohibit insiders to make a profit or avoid loss at the cost of general investors.Originality/value– The outcome of this research will be helpful for managers and financial regulatory bodies to ensure better fiduciary responsibility of the key employees towards the general investors. An important barrier to the creation of an efficient market can be removed by being aware that insider trading occurs in the face of an ineffective legal and regulatory system.

The Importance of the implementation of financial regulation in crypto currency

Research Question and Justification Why it is very necessary to implement financial regulation in cryptocurrency? Can financial regulation play a significant role in stabilising the cryptocurrency market? What would be the post implementation effect of financial regulatory body on crypto currency assets?

금융소비자보호법상의 금융분쟁조정절차에 관한 절차법적 측면의 고찰

Whether to emphasize the principle of private autonomy in the procedural aspect in mediation or the number and outcomes of case resolution through mediation is a matter of individual values and philosophy of each country or individual. In the former case, emphasis is placed on the provision of a fundamental resolution to a dispute such as satisfaction of the parties with the procedure or a genuine agreement between the parties, and in the latter case, the focus is on the cost-effectiveness of the mediator’s work. The former represents mediation based on the Singapore Mediation Convention(United Nations Convention on International Settlement Agreements resulting from Mediation), the latter represents the UK's Ombudsmen service.
 In general, emphasizing party-leading civil procedure countries are place importance on the parties' right to form the procedure itself or take the party’s initiative in mediation proceedings. On the other hand, court-leading civil procedure countries which are strengthening the authority of the courts taking the position that mediator must be a lawyer, or at least a person with a lawyer's qualifications. They thought mediation is fundamentally the same system like civil litigation.
 Unfortunately, the latter point of view could only be used as specifying mediation system of the country, but it is contradictory to the origin of ADR(Alternativie Dispute Resolution) system or mediation system. It goes without saying that it also contradictory to the standards for mediation of the Singapore Mediation Convention.
 This my view does not mean that there is no need for a dispute resolution method which emphasizes the number and outcome of case resolution. I am fully understand the reason why the performance-oriented dispute resolution method was activated in Korea.
 Therefore, I propose to establish a separate performance-oriented dispute resolution system from the party-leading mediation process. In that case, the dispute resolution procedure can play its own independent role as another form of alternative dispute resolution.
 In the case of the financial sector, between the roles of the Financial Supervisory Service and the Financial Dispute Mediation Committee’s work must be distinguished, and the Financial Dispute Mediation Committee needs to be operated as an independent institution. The goals of the Financial Supervisory Service should be different from the goals of the Financial Dispute Mediation Committee. While the Financial Supervisory Service should play the role of a representative financial regulatory body, the Financial Dispute Mediation Committee is not a tool to increase the regulatory effect of the Financial Supervisory Service, but rather stands impartiality between financial consumers and financial institutions to resolve financial disputes fairly.
 Korea's financial dispute mediation, which gave the same effect as a final judgment effect to the decision of the Committee, without guaranteeing the independence of the Financial Dispute Mediation Committee, could be problomatic in Dispure Resolution System. This ends to blocking the path to judicial review of court.
 In case both parties do not object within two weeks of the financial mediation committee’s decision which regards as consent of both and only on party’s consent(usually finantial consumer’s consent) regards as bilateral consent (acceptance) is not fit for Korea civil procedure system. The Korea civil Procedure Act grants Res Judicata effect to settlement and the effect also recognized in mediation of the Financial Dispute Mediation Committee’s decision.
 It is also not appropriate to translate the UK Financial Ombudsmen Service as a mediation. There is also a big problem in combining the UK financial ombudsmen service that recognizes unilateral consent within a very limited scope. UK Ombudsmen service is a unique system which is different from the existing worldwide ADR or mediation.

Effects of Marketing Strategy on Banks’ Performance

The purposes of this study are to determine the relationships that exists between banks’ marketing strategies and their performance, and to establish the mediating role of customer satisfaction in this relationships. To achieve these purposes, interview data, which were subsequently analyzed by using thematic analysis method, were collected from a sample of sixteen bank marketing managers - who were selected through quota sampling technique. On top of this, survey data were gathered from two hundred and thirty eight bankers who were selected through simple random sampling technique. Finally, descriptive, correlation, and regression analyses of these data were conducted by using SPSS v25; Sobel test method was used to test the statistical significance of the mediated effect of banks’ marketing strategies upon their performance; and, bootstrapping method was used to test related hypotheses. Accordingly, the results of qualitative analysis, among other things, show that failures on the part the country’s financial regulatory body in issuing legal instruments and failures on the part of the banks are the main reasons for the deficiencies in the country’s banks marketing strategies and mixes. In addition to these, the results of quantitative analyses confirm that banks’ marketing strategies have statistically significant direct and indirect effects upon banks’ performances; customer satisfaction has statistically significant direct effect upon banks’ performance; and, the mediated effects are partial mediation only. Therefore, these findings are highly important, and have useful implications for the country’s bank executives, policy makers, academics, and financial regulatory body. Keywords: Product, Pricing, Distribution, Communication, Customer Relationship, Sustainability Abbreviations: CS = Customer Satisfaction, BPR = Banks’ Performance, PS = Product Strategy, PRS = Pricing Strategy, CMS = Communication Strategy, DS = Distribution Strategy, CRS = Customer Relationship Strategy, SMS = Sustainable Marketing Strategy DOI: 10.7176/EJBM/14-13-01 Publication date: July 31 st 2022

Growth and Development of Islamic Banking: A Global Review

The paper appraises the growth and development of Islamic banking sector internationally in various parts of the world covering several countries from across the globe, including Saudi Arabia, Iran, Bahrain, Kuwait, UAE, Qatar, Jordan, Egypt, Oman, Turkey, Malaysia, Pakistan, Bangladesh, Indonesia, Singapore, Philippines, Sudan, Nigeria, Algeria, and Kenya. Islamic banking domains in the western and European regions were also part of the discussion involving the following countries: Australia, UK, Luxembourg, Germany, Italy, France, USA and Canada. The paper employs qualitative research approach in evaluating the progress of Islamic banking initiative throughout various countries of the globe by fetching data from the central banking as well as from the financial regulatory bodies of different countries. Islamic banking initiative considerably developed in the Middle East region, spreading to global scale from this region to other Asian and European countries. The growth of Islamic banking setup in non-Muslims countries reflects the power and potential of Islamic banking as a global financial force. The paper provides key facts along with vital information offering a comprehensive review of global growth of Islamic banking initiative in major regions of the world including Middle East, Asia, Africa, Europe, Australia and North America.

Prospects for international financial deglobalisation and its potential impact on international financial regulation

ABSTRACT The prospects of deglobalisation have been discussed in relation to international trade and finance, and this article queries how recent geopolitical risks may affect the shape of international financial regulation. The article critically presents an examination of international financial globalisation that has already been chequered for a long time, and argues that there is a strong likelihood of no or incremental change to international financial regulation due to the chequered nature of financial globalisation it already supports. However, international financial regulatory bodies can be affected if individual jurisdictions that are members of international organisations make more pronounced political responses. Although the network of experts underlying international financial regulation have technocratised issues to a significant extent, the politicisation of issues has always persisted. The article therefore addresses the potential for scenarios of more dramatic and turbulent change in international financial regulation and sketches the broad contours of such possibilities.

Money laundering in the United Arab Emirates: the risks and the reality

PurposeThis study aims to examine the possibility of laundering money through the United Arab Emirates (UAE), the perceived risk and the stark reality. That money laundering prevention mechanisms are being circumvented is evident by reference to the international assessments by the Financial Action Task Force and information from key informants. To develop effective improvements, the modus operandi of money laundering needs to be re-examined.Design/methodology/approachThe empirical findings are based on over 60 semi-standardized interviews with alleged criminal and expert compliance officers operating in an international arena. These findings were subject to a qualitative content analysis, while a further quantitative survey of around 200 compliance officers expanded on the techniques of money laundering. This served to explore whether there was a discrepancy between the presentation of money laundering in the literature in contrast to reality.FindingsOwing to the transnational nature of money laundering, the global financial market is dependent on the uniformity of anti-money laundering (AML) regulations. Despite immense progress, there are still several key weaknesses in the financial system of the UAE, such as the existence of Free Zones and the divergence of AML awareness.Research limitations/implicationsThe scope of the interviews is limited to the personal experience of the informants. This is mediated by seeking uniformity in answers as well as literature support.Originality/valueThis paper, supported by empirical evidence, discerns why the current regulatory measures are minimally effective. There is an unmistakable need for the international coordination of financial regulatory bodies. The literature describes the occurrence of money laundering, but no studies have engaged to examine the pragmatic mechanism in place which allow money laundering to persevere despite the significant improvements of AML policies.

Relationship Between Money Market and Economic Growth in Nigeria

AbstractThis paper investigated the relationship between money market and economic growth in Nigeria. Secondary data for 38 years covering the period of 1981 to 2018 was used. Econometric methods of analysis of Lag Length Selection Criteria, ARDL Bound Test for Cointegration, Long Run and Short Run Estimations and Diagnostics Tests of Serial Correlation, Hetroskedascitity, Cusum Test and Ramsey Reset Test were carried out. The result found that there is long run relationship between money market and economic growth, as indicate by the F-statistics 4.48 which is higher than the upper bound values at all level of significance. This suggests that there exists a long run relation between money market and economic growth. The results of the error correction suggest the validity of long-run relationship between money market and economic growth. The study recommends that financial market regulatory body to increase the size of the money market through policy relaxation in order to achieve economic growth in the country.Keywords: Money Market, Economic Growth, Bound Test.JELClassification: C01, E05, G10

In and out of revolving doors in European Union financial regulatory authorities

AbstractAlthough the idea of revolving doors evokes the dynamic image of moving in and out of public and private sector jobs, most scholars take a static view of the revolving door phenomenon, looking mainly at entrances, sometimes at exits, but almost never at both. This is a serious oversight given that normative concerns about revolving doors turn mainly on assumptions about how individuals become socialized through their multiple interactions working on both sides of the revolving door. Our study seeks to revive a bidirectional picture of revolving doors. To this end, we use financial regulatory politics in the European Union (EU) as our case and a unique dataset of nearly 200 regulators from three EU financial regulatory bodies as of 2018. We first describe the extent to which these multiple movements are happening and, second, we explain differences between those who make zero revolving door movements and those who make multiple movements. Our central argument is that previous job experience in the regulated industry (finance) generates valuable expertise and network ties that in turn lead to more movements. Experience in industries outside of finance, however, diminishes this expertise and loosens network ties and hence leads to fewer movements. Our results support these arguments. We also find those making multiple movements are not in the business of finance (traders or those leading sales or marketing teams) but instead have careers on both sides of the revolving doors focused on law, policy, and government affairs.

Drivers of Mobile Money Services Development in Zimbabwe

This study sought to identify the drivers of mobile money services development in Zimbabwe using Ecocash as a case study. Through purposive sampling, respondents were selected from financial institutions, regulatory bodies, customers, and agents. The research showed that in Zimbabwe the development of mobile money services is influenced by several factors such as a high mobile telephone penetration rate, a high number of unbanked people owing to poor access to traditional banking services, a lower level of internet penetration levels, customer awareness of the service because of aggressive branding, security and ease of use, and a dense networks of agents. Fast technology diffusion was also a factor that influenced the fast adoption of mobile money services in Zimbabwe. More research is needed to assess the impediments in countries where the adoption of mobile money services has not been as spectacular as in Zimbabwe or Kenya.

The Impact of Debt on Capital Structure: Empirical Evidence from Nigeria

This study evaluates the impact of tax shield on capital structure of quoted non-financial firms in Nigeria. Five hypotheses were formulated following the dependent variables of Long Term Debt Ratio and Short Term Debt Ratio. The independent variables employed for this study are: Operating Income, Non-Debt Tax Shield, Debt Tax Shield, Trade Credit Ratio, Firm Size and Firm Leverage. This study is based on ex-post facto research design and made use of panel data set collected from thirty five (35) non-financial companies over a five year period of 2015 and 2019 financial year. We analyzed the data set using panel least square regression analysis. Our finding supports the trade-off theory developed by Modigliani and Miller’s [1] who explained that, “the relevance of debt with the existence of taxes is beneficial for the formation of a firm’s capital structure and serves to shield earnings from taxes. The result showed that both variables of debt tax shield and firm leverage significantly impact on capital structure of non-financial firms in Nigeria during the period under investigation. The study recommends among others that concerted efforts should be made by financial regulatory bodies to stabilize the tax structure/system in Nigeria. This is based on the fact that reduction of tax frictions not only increases capital buffers for all firms; it also decreases the “Risk Taking” levels of firm managers.

The capital structure decisions of Islamic banks in the GCC

PurposeThis study aims to find the determinants of the capital structure of Islamic banks in the Gulf Cooperation Council countries (GCC). The uniqueness of the case of Islamic banks stems from the fact that they are not only subject to the supervision of financial regulatory bodies that organize the banking sector (e.g. central banks) but also subject to the guidelines of Shari’ah law governing their financial transactions, products and contracts. Such characteristics are expected to have an impact on the capital structure decisions of Islamic banks compared to their conventional counterparts.Design/methodology/approachTo achieve the research purpose, an empirical model was constructed to describe the relationship between leverage and the independent variables. The empirical model was tested through multivariate regression analysis using a panel data approach of 12 Islamic banks in the GCC for the period 2005-2014. Three types of regression analysis were used as follows: ordinary least squares (OLS), fixed-effect and random-effect regressions on panel data.FindingsThe research findings show that the leverage of Islamic banks in the GCC is positively related to size of the firm (SIZE) and growth opportunity (GROWTH); and it is negatively related to profitability of the firm (ROA), tangibility of the firm’s assets (TANG) and financial market development (MRKT). The results indicate that larger Islamic banks tend to be relatively more diversified with higher credit ratings, which lower their cost of funding and relatively increase its profitability and the bank’s customer/depositor base. The results also show that higher profitability ratios indicate relatively more internal funds to cover future investments, which leads to less reliance on external funds in the form of debt and/or equity. However, the higher the growth opportunities of Islamic banks, the faster the depletion rate of internal funding, and the more external debt financing is acquired to cover the expansion plans. In addition, the results show that in developed financial markets, savers tend to purchase less traditional depository products, and they prefer to invest directly in the financial markets to avoid higher commissions. The results are in line with the pecking order theory, which states that Islamic banks in the GCC tend to prefer sources of funds that have the least transaction cost and reveal minimal information to competitors. Hence, bank management resort to internally generated funds by its operations rather than acquiring external funds. Furthermore, the results are weakly explained by the agency theory, which states that as the firm assets become more tangible, the required monitoring cost is reduced; and hence, shareholders will have less tendency to raise more debt for the purpose of sharing the monitoring cost with debt holders.Research limitations/implicationsThis research study contributes to the theory of capital structure in re-validating the findings of a previous theoretical and empirical study on capital structure in the GCC and abroad. It helps understand the capital structure of Islamic banks in comparison with financial and non-financial firms. Future research is recommended in several areas. In terms of the methodology, it is recommended to conduct the research topic surveying management and financial executives of Islamic banks in the GCC; this will validate the results using a triangular approach supported by the findings of this paper. It is also recommended to apply the research methodology in other parts of the world where Islamic banking exists. Finally, as studies on the capital structure of financial institutions and other regulated sectors are rare, it is recommended to intensify research effort in these sectors to strengthen our knowledge of capital structure.Practical implicationsFrom a practical perspective, this research bridges the gap between theory and practice in many aspects. The findings can serve Islamic bank executives as guidelines to understand the market and competitive reaction in response to capital structure decisions. On the other hand, research analysts and equity holders can use the findings in their debt and equity research valuations, assessment of the size of dividends and profit distributions, and to make more informed decisions to buy/sell financial securities. Furthermore, the findings help regulatory bodies to issue informed regulations in relation to capital adequacy ratios, reserve requirements, provisions and payout decisions to achieve policy intended purpose. In addition, organizations that are responsible for setting accounting and audit standards for Islamic banks will learn more about the industry practice; and hence, be able to pass practical standards. Moreover, the findings realize the recommendations of international financial regulatory bodies, such as the International Monetary Fund (IMF), the World Bank (WB) and other concerned organizations that emphasize the importance of further understanding of financial institution practices, to enable more effective formulation of risk management techniques, which may prevent future financial crisis.Originality/valueThis paper was amongst the few research studies conducted on determinants of capital structure in the GCC and specifically on the Islamic banking sector.

Systemic risks for investments under global uncertainty

Under growing uncertainty and interdependence, systemic risks are essential for the effective functioning of the global financial system. Therefore, the subject of the proposed study is systemic risks for the global financial system. The goal of this work is to identify and disclose the role of systemic risks in carrying out investment activities. The article solves the following objectives: to identify and reveal key features and characteristics of systemic risks, to identify new challenges in systemic risk management, to identify new manifestations of systemic risks. To achieve the goal of the study, the following methods are used: system-structural, synergetic, method of comparative analysis, method of analysis and synthesis. The study reveals the following results. The main approaches to defining the concept of systemic risks are identified and their comparative analysis is carried out. The main approaches to measuring systemic risks and measurement criteria are identified. The differences between the concepts of systemic and systematic risk are revealed, and the mechanism of their interrelation is identified. New systemic risks in the conditions of global uncertainty are identified. The impact of the COVID-19 pandemic on systemic risks is determined. The main new types of risks and threats to financial stability in the long run are identified. The main directions of response of financial regulatory bodies to new systemic risks are determined. The main effects of the impact of measures to stimulate economic growth on the state of financial markets and investment activities are identified. The conclusions of the study are as follows. It is determined that there is no unanimous definition of systemic risk. Key features of systemic risks are identified, such as unpredictability, large-scale impact, spillover effect, impact on the real sector of the economy, etc. It is determined that when measuring systemic risk there are two problems: the measure of quantitative expression of systemic risk as a unit and the distribution of systemic risk between individual financial institutions. It is revealed that systemic risk can be a source of systematic risks. The COVID-19 pandemic, as an extraordinary macroeconomic shock, is belived to lead to new systemic risks. It is revealed that new types of systemic risks include, in particular, default risks, complexity of the macroeconomic environment, risks of sovereign financing, risk of lack of liquidity. The impact of new systemic risks on investment activities is revealed, in particular, changes in the business models of financial institutions, changes in the strategies of investment funds, lower ratings of debt securities, increasing the cost of debt financing, lack of liquidity.

Virtual asset trading platforms: An assessment of the stability risks and the potential for self-regulation

In response to recent reports by influential financial regulatory bodies, this paper aims, firstly, to outline the financial, operational and systemic risks affecting the stability of virtual asset trading platforms (VATPs). It highlights risk management techniques that can be used to mitigate them. Some of these risks are applicable to trading platforms in general, and some are unique to Blockchain technology. Second, it makes the case for international self-regulation by VATPs and outlines the measures that platforms can adopt in order to build market stability and enhance client security. It argues that self-regulation can align platform and client interests, reduce systemic risk in the virtual assets market and act as a viable alternative to regulation from national or international bodies.

Ten Years of the Global Reform of Financial Regulation: What is ahead?

Global financial crisis of 2008–2009 demonstrated the need for reforms in the system of financial regulation. An institutional mechanism was created under the auspices of the G20 with the purpose to implement a global reform. In the article results of the postcrisis global financial reform are analysed in contingent with review of the evolution of institutional mechanism, which specifics often determined success or its absence in particular directions of the reform. The author selects and reviews three main periods of development of the global financial regulation’s institutional mechanism. In the initial period – the first years after the crisis works were progressing in two directions simultaneously: a) co-ordination of activities of national financial regulatory bodies in coping with the crisis processes and neutralization of its consequences; b) development and reconciliation of major global standards of financial regulation. We can consider that period as successful because crisis processes were overcame in relatively short time, trade and currency wars were also avoided and at the same time international regulatory standards were widely agreed.The second period according to the author’s classification (approx. 2012–2015) – transmission to the implementation of agreed international standards at the national and supranational (EC) levels. That time a range of difficulties and contradictions between leading countries revealed. First of all these problems related to the spheres where the regulations of transnational activities of financial institutions had to be agreed. As the author shows exactly in that time a problem of the so-called asymmetrical sovereignty in the financial policy aggravated.The third period is continuing in the present time. During this period, from the one side, the global financial regulation expands its coverage according to emergence of new challenges, but from the other side the interest to the reform is being loosing and the trend to increase of the independence of the national financial regulators is expanding. So the threat to fragmentation of the international financial markets and revision of already agreed regulatory standards became not illusive.Special attention in the article was paid to analysis of the problem of regulating the shadow banking or non-bank financial intermediation (NBFI), which are till now largely outside of the regulatory mandate of the governance bodies. Rapid growth of transactions by the latter, according to the author’s opinion, is a threat to the global financial stability especially taking into account such factors as its close interconnectedness with traditional financial institutions (banks), exposure to the bank-like risks, the wide implementation of financial innovations for making new unregulated products.Investigating new challenges beyond the perimeter of the post-crisis reform the author came to the conclusion that implementation of financial technologies as well as the necessity to take into account ecological and social factors require serious transformation of the global financial system as well as it’s regulation. Taking into account the global nature of new challenges the need for international co-operation of financial regulatory bodies will be continued.