Global Financial Market Research Articles

INTERNATIONAL FINANCIAL ACTIVITIES: ACCOUNTING, TAXATION AND INSURANCE

The need for the study of international financial relations is justified by the lack of modern scientific discourses on the methods of regulation of financial tensions in the new epidemiological conditions of business environment and appropriate methodology to manage the level of rejection of players in the international financial market. The purpose of this study is to find points of contact between accounting, tax and insurance accounting in the development of joint measures to overcome global financial risks in the process of international cooperation. The focus of the study: the development of modified accounting tools for a comprehensive and systemic solution to the internalization of international relations; unification of the national tax system, based on the requirements of the modern development of the global financial system; development of insurance measures to overcome global risks in the process of international financial cooperation. The research was conducted on the basis of expert reviews and assessments of the state of international financial relations, modern theoretical and methodological, normative-legal and legislative aspects of international financial activity; methods of dialectics, methods and principles of scientific knowledge, statistical and economic tools were used. The growth of cross-border cooperation, the emergence of new financial flows and the transformation of financial relations online have created a number of new financial linkages that not only change the traditional financial systems worldwide and the global financial system, but also require the universalization, modification, internalization of certain accounting, taxation and insurance instruments. In order to universalize the measurement of failure trends of business players in international financial markets, one of the possible models for managing a dynamic object – a system-situation model of behavior of international investors, based on combining the systemic and situational views of business players on the interpretation of financially sensitive information – is proposed; a schematic representation of the vulnerability of financial and innovation activities of business players in the context of unpredictable reactions to the proposed positions of the global financial market. It is determined that the development of international financial activity should move in the direction of: the coordination and development of countries in various financial spheres on the adoption of appropriate regulations supranational character; meaningful universalization in international financial relations; restructuring of the national financial system of Ukraine; the viability of the national financial system in the direction of centralized imperative regulation of international financial relations.

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.

Reserve currency competition in a polycentric world financial system

This research is devoted to the issues of reserve currency competition in the global financial system. The paperaimsto investigate key sources of competitive advantages of reserve currencies in the context of the development of the global financial system towards currency multipolarity and assess how digital transformation can affect the drivers of reserve currencies’ competitive positions in the global financial system. The author uses the followingmethodsof scientific research: analysis, synthesis, abstraction, deduction, induction, and logical method. The article notes that the financial market capacity is the key factor of reserve currency competitiveness. The author emphasizes that monetary policy instruments that provide funding for financial institutions play a key role in strengthening reserve currency competitiveness in the global financial market. The author highlights that during the COVID-19 crisis monetary policy of the central banks that issue reserve currencies stabilized the situation in the world financial system and strengthened the positions of the major reserve currencies in the global financial market. The author notes that the increase of monetary policy cooperation between central banks points to the evolution of the world financial system towards currency multipolarity. The research emphasized that the development of ecosystems driven by digital transformation can significantly affect the competitive positions of currencies in the global financial system. The authorconcludesthat the global financial system is evolving towards currency multipolarity meaning that the US dollar will remain a leading reserve currency and at the same time other reserve currencies will likely play a bigger role.Further researchof currency competition problems may investigate the impact of digital transformation on competitive positions of reserve currencies in the global financial system.

DYNAMIC RELATIONSHIP BETWEEN CAPITAL INFLOWS AND BANK LENDING: THE ROLE OF COMMODITY PRICE AND GLOBAL FINANCIAL MARKET SHOCKS

This paper investigates the dynamic relationship between capital inflows and bank lending in Indonesia. We use a Structural Vector AutoRegression (SVAR) model that allows exogenous international commodity prices and global financial market fluctuations to influence capital inflows. We find that commodity price shocks are more important as compared to global financial shocks in explaining the variance of capital inflows in the long run. Furthermore, shocks from capital inflows lead to a change in bank lending allocation across economic sectors.

Stock market contagion during the COVID-19 pandemic in emerging economies

The purpose of this paper is to examine the connected dynamics of the affected Asian financial markets and global financial market in relation to the outbreak of the coronavirus (COVID-19) pandemic. We particularly examine the temporal dependence and connectedness of the affected markets with the global financial market by using the time-varying dependence approach in a time-frequency space under COVID-19. Our findings indicate a strong, positive dependence among the investigated markets’ due to the outbreak of COVID-19. In addition, we report an increased tendency of co-movements over the higher horizon which is documented by COVID-19. These findings are of significant interest for market participants, policymakers, and international investors.

A Blockchain and Metaheuristic-Enabled Distributed Architecture for Smart Agricultural Analysis and Ledger Preservation Solution: A Collaborative Approach

Distributed forecasting of agriculture commodity prices has an attractive research perspective that delivers active breakthrough analysis of the rapid fluctuations in pricing forecasts for participating stakeholders without being manually dispatched lists. The increased use of an efficient forecasting mechanism for the agriculture information management of generated records and processing creates emerging challenges and limitations. These include new government mandates and regulations, the price of land for expansion, forecasting the growing demand for commodities, fluctuations in the global financial market, food security, and bio-based fuels. Building and deploying distributed dynamic scheduling, management, and monitoring systems of agricultural activities for commodity price forecasting and supply chains require a significant secure and efficient approach. Thus, this paper discusses a collaborative approach where two different folds are demonstrated to cover distinct aspects with different objectives. A metaheuristic-enabled genetic algorithm is designed to receive day-to-day agricultural production details and process and analyze forecast pricing from the records by scheduling, managing, and monitoring them in real-time. The blockchain hyperledger sawtooth distributed modular technology provides a secure communication channel between stakeholders, a private network, protects the forecasting ledger, adds and updates commodity prices, and preserves agricultural information and node transactions in the immutable ledger (IPFS). To accomplish this, we design, develop, and deploy two distinct smart contracts to register the system’s actual stakeholders and allow for the addition of node transactions and exchanges. The second smart contract updates the forecasting commodity pricing ledger and distributes it to participating stakeholders while preserving detailed addresses in storage. The simulation results of the proposed collaborative approach deliver an efficient E-agriculture commodity price forecast with an accuracy of 95.3%. It also maintains ledger transparency, integrity, provenance, availability, and secure operational control and access of agricultural activities.

The Genesis of Financial Market Institutionalisation in Ukraine: An International Perspective

The relevance of the article is due to the need for a comprehensive analysis of the latest processes in the global financial system, as well as a complex development of a methodological approach to its study. With the transition to digital technologies in the global financial market, in particular, when processing and storing data in electronic format, there is a change in the form of financial circulation, which can lead to a number of problems and risks. In this context, special attention should be paid to the international credit market and the international bond market, which are, in fact, circulating in cyberspace and are evolving through info-communication technologies. The purpose of this research is an in-depth analysis of the main globalisation processes of the world economy and their impact on the development of competition between exchange and over-the-counter trade. The study used general scientific methods of analysis, theoretical generalisation, and synthesis, as well as methods of mathematical, statistical, and economic analysis. According to the study of the dynamics of capitalisation of the global stock market, the authors of this article identified a trend towards dynamic growth in the use of alternative trading systems, which is a factor in the development of exchange and over-the-counter securities trading. The article provides a comprehensive analysis of the directions of impacts of digitalisation on the global monetary and financial system, among which the positive and negative effects are considered in detail and substantiated. The negative effects of virtualisation of the global monetary and financial system are identified, as well as perspective directions of modification of the economic system and finance with the introduction of digital technologies are formulated. The information presented in this paper can be used to further consider the dynamics of stock market capitalisation in the world, as well as to develop methods to improve the efficiency of digitalisation of operating processes for individual enterprises and the global economy as a whole

The varying spillover of U.S. systemic risk: A functional-coefficient cointegration approach

We examine the spillover effects of systemic risk from U.S. to U.K. based on a functional-coefficient cointegration approach. We find that the international spillover of systemic risk is varying as the global financial cycle evolves. When the global financial market is booming or busting, the systemic risk spillover effect could be elevated. The forecasting experiment suggests that the systemic risk spillover through the global financial factor can help improve the forecasting accuracy of future systemic risk in U.K.

Effects of COVID-19 on Global Financial Markets: Evidence from Qualitative Research for Developed and Developing Economies.

The research aims to prioritize the pandemic’s impact on the financial markets of developed and developing economies using a multi-criteria decision-making approach. The results revealed that COVID-19’s pandemic effects on financial markets differ between developed and developing nations. COVID-19 pandemic affects developed countries’ financial markets more through supply reduction, demand reduction, and economic instability. Regarding developing nations, confidence and expectations, changes in consumption patterns, and the bandwagon effect are the three most significant impacts of COVID-19 pandemic on financial markets. The best decisions to lower the effect of COVID-19 pandemic on developed nations’ financial markets are the declaration of the stimulus package and support of small-and-medium-sized enterprises. Contrastingly, in developing countries, support for vulnerable households and declaration of the stimulus package are the best decisions to combat COVID-19’s negative impact on their financial markets. As practical policy implications for lowering COVID-19’s negative impact on financial markets, the promotion of new financing instruments, reconstruction of the relationship between public and private sectors, and support of vulnerable households and enterprises are highly recommended.

Parcel, Bubble, Shell: The Insular Environment of Finance

This article explores how the design of an insurance brokerage for Willis Faber & Dumas by Foster Associates architects meticulously accommodate an increasingly constricted financial sphere. It analyzes links between privatization and delimitation across various scales: from material and spatial implications within the building, to its role in urban development schemes, to the intersection of domestic social and economic policies with international finance. The analysis centers on the local spatial implications of the United Kingdom’s transition in the 1970s away from a social democratic system that privileged industrial labor and manufactured goods, toward becoming an international center for the transaction of “invisibles” within a global financial market. The architects of the Willis Faber & Dumas headquarters described an “interiorized” architecture, with a diaphanous mirrored glass envelope maximizing views to the outside world while intensifying an inward focus. This paradigm of enclosure produced a model of internality particular to the outward expansion of capital.

РОЗВИТОК ФІНТЕХУ В УКРАЇНІ ТА ЙОГО ПРОГНОЗУВАННЯ НА ПРИКЛАДІ ІНДУСТРІЇ ПЛАТІЖНИХ ПОСЛУГ

The article examines the prerequisites for accelerating the development of fintech in Ukraine and in the world. Based on the definition of a fintech company as an organization working in the field of financial technology and using new business process models, it is reasoned that the value it offers to consumers is based on the use of information technology that has emerged during the active spread of the Internet. Ukrainian fintech market analysis demonstrates that there are no global companies in the Ukrainian domestic market. This is the result of its level of development and weak integration of Ukraine into the global financial market, as well as corruption, the uncertainty of the industry status, and relative poverty, which makes our country unprofitable for investment and infrastructure deployment of foreign fintech companies. Particular attention is paid to the market of payment services as a priority area of fintech companies. The structure of the payment services market in terms of the participating companies is described and its competitive parameters are determined. Despite the formal monopoly, in practice the market for services is competitive, industry leaders do not pursue aggressive competition policies. A comparative analysis of the fintech services and banking services markets dynamics in the field of payments is conducted by comparing the financial results of activities. The fintech companies’ gross aggregate profit growth forecast and their main competitor among banks in the field of payments are constructed. Based on optimistic, pessimistic, and realistic options, the time interval of income convergence of leading competitors in the payment services market is determined. The preconditions for changing the competitive situation in the field of payments are determined. The conducted analysis demonstrates that while maintaining the current trends, fintech companies as a generalized force will be able to become a powerful player in the payments market no earlier than 2028. Banks have up to ten years to adapt and adopt new rules of the game. Competition with fintech companies requires significant adjustments to banks' business strategies.

ОСОБЛИВОСТІ РОЗВИТКУ ТА ДЕРЖАВНОГО РЕГУЛЮВАННЯ РИНКУ БАНКІВСЬКИХ ПОСЛУГ УКРАЇНИ В УМОВАХ ЦИФРОВІЗАЦІЇ

The article considers modern features of digitalization of the banking sector and a relatively new market - cryptocurrency. The specifics of the banking sector in the digital economy and the main problems that arise in the process of their activities are analyzed. The first fully implemented startup in the neobank industry is the Monobank project - a striking example of a virtual bank that is not a bank associated with the traditional format. It is proved that the emergence of neo-banks as a new form of banking is associated with the significant development of Internet technologies. The relatively new cryptocurrency market is of great interest for research in the current context of financial innovation in payment services. Cryptocurrency poses a challenge to Ukraine's financial system, as both the central bank and other government regulators cannot control its issuance and circulation. They show the dynamics of capitalization of the cryptocurrency market, where bitcoin predominates. Banks play a signifi-cant role in the functioning and sustainable development of the economy, so they must constantly implement the latest advances in scientific and technological progress in their daily activities. Ukraine's banking system in the context of digitalization should develop not only to maintain international competitiveness, but also in order not to lose the most important organizational and economic ties with the global financial market. In recent years, the Ukrainian banking sector has made significant progress in implementing reforms and laying the foundations for a more secure future. Improving banking performance can contribute to a stronger and more productive national economy. Measures to increase productivity in banking can also improve transparency, reduce informality and increase access to capital for businesses and individuals. Digital technology has radically changed all financial relations in society. Digital banking services, widespread online platforms and digital channels of communication with customers require an approach to assessing the digitalization of banks, strategic determination of competitiveness, strengths and weaknesses of the bank. The development of digital banking is a way to economic transparency, reduce trends and increase tax revenues.

Research on Financial Market Risks Based on VaR Model

With the continuous development of the Internet financial industry, its impact on people's daily life is growing. Under the influence of the information technology and the financial innovation, the volatility of the financial market has been significantly enhanced, and the financial risk has become increasingly serious. The COVID-19 in 2020 still has a profound impact on the global financial market. The reasonable measurement of the financial risks is the most important step in the financial risk management. Based on the sample analysis of the Standard & Poor's 500 Index from January 3, 2013 to June 30, 2020, this paper measures the risks by analyzing and calculating the value at risk (VaR) of the sample data by different methods. This paper mainly establishes the ARMA model, the GARCH model based on bayese statistics, and the POT model based on the extreme value theory, and compares and analyzes the VaR values obtained by the three models. Finally, the effectiveness of VaR is tested by VaR backtracking test, and the advantages and disadvantages of the methods are compared and evaluated.

ПОНЯТИЕ И СУЩНОСТЬ ВЕНЧУРНОГО ЭФФЕКТА КАК ЦЕЛИ ИННОВАЦИОННОГО БИЗНЕСА

Considering the evolutionary nature of the development of the world economic community and the inevitability of the fourth industrial revolution, it becomes obvious that in order to successfully compete with the key players in the global financial market, Russia must modernize its national innovation system and ways of its financial support. This determines the importance and relevance of scientific research in the field of developing recommendations that allow organizing the stable development of the venture financing system in the modern economy.

Nove tehnologije i uloga kriptovaluta na nivou investicionog portfolija

New technologies have a significant role in modern financial markets. The application of new technologies, application and software solutions has enabled financial institutions and individual and institutional investors to use mathematical-statistical and econometric models, which are based on analysis and evaluation of investment portfolios, financial risk assessment and extrapolation, as well as predictability related to cyclical economic trends, which are directly reflected in the investment portfolio. Due to the impact of the financial crisis, and especially due to global negative economic trends caused by the COVID-19 pandemic, alternative forms of financial assets that are directly created by the application of new technologies are becoming increasingly important in the international financial market. These alternative forms of financial assets are presented as cryptocurrencies. Bitcoin is the first cryptocurrency in the global financial market, and Ethereum is the second cryptocurrency in terms of market turnover. In this regard, arises the question: "Do these two leading cryptocurrencies have a significant impact on the modern financial market, as well as on the decision of individual and institutional investors regarding a different structure of the investment portfolio?" Restructuring the investment portfolio by including cryptocurrencies, aims to achieve portfolio diversification in order to better manage market and financial risks. This paper will analyze the impact of cryptocurrencies, their volatility, turnover volume and the possibility of using them as alternative financial assets of an optimal investment portfolio.

The Impact of Russia-Ukraine Conflict on Global Financial Markets

The Impact of Russia-Ukraine Conflict on Global Financial Markets

Сутність і роль інвестиційних фондів і компаній

The purpose of the publication is to closer define the essence, role and peculiarities of investment funds and companies. The analysis of researches on the subject of the article identified the lack of clearness concerning the issues of essential differences between the investment fund and the company. The article considers the definition of the studied concepts according to dictionaries and practical examples of the operating investment companies and funds. The peculiarities of the latter and types of specialization of investment funds are specified. There is a fundamental difference between these economic entities, which is that the investment company is a commercial organization with minimal restrictions and maximum freedoms for the implementation of investment and related activities for profit. An investment fund is either a specialized part of such a company or is a public institution with the presence of restrictions that are stipulated by the policy of its founders. It is proved that an investment company can often be both a holding company with a wide range of related activities, harmoniously combined with investment: insurance, consulting, brokerage, banking, credit and depository activities, accounting, etc. In some countries, legal restrictions do not allow a successful combination of investment and other activities, for example, insurance. It is determined that the evolution of investment activities in the global stock market causes a gradual loss of competitiveness of mutual investment funds. Instead, ETF funds have long taken their place. In the global financial market there is a limited number of investment companies – founders of major ETF funds with a significant level of competitiveness, which makes problematic and (or) inappropriate entry into the market of new funds. In addition to accumulating temporarily free funds and professional management of investment resources, the important role of investment companies and funds is the formation of the infrastructure of complementary pension provision.

Dynamic Co-movement and Spillover Among Global Financial Markets During COVID-19: Evidence From Wavelet Coherence Analysis

Dynamic Co-movement and Spillover Among Global Financial Markets During COVID-19: Evidence From Wavelet Coherence Analysis

О понятии цифровых финансовых активов в условиях современных реалий: финансово-правовые аспекты

This article reveals the issues of the current state of legal regulation of digital financial assets. There are a lot of questions concerning the definition of a number of technologies that are actively used in international and national financial systems. These include mining, NFT, centralized and decentralized cryptocurrency exchanges, cryptocurrency, tokenized shares, etc. The authors pay attention to the current problems that exist in connection with the advance of public relations of the main aspects of legal regulation. The existing normative acts regulate already fully developed financial and civil relations, in which individuals and legal entities actively participate, only in the abstract form. Digital financial assets represent a new phenomenon in the global financial market. The Russian Federation is distinguished by the initial stage of legal regulation of blockchain and related events. The basis for the development of the digital financial assets market is created thanks to financial and legal regulation, as well as the development of the civil legal framework, thanks to which clarity is introduced for participants in new public relations. Fraud and corrupt actions of various participants in public relations are becoming widespread in conditions of insufficient legal regulation. The purpose of this study is to draw attention to the current gaps in legal regulation, due to which the user of digital financial assets suffers. At the moment, it is necessary to make additions and amendments to the legislation regulating the procedure for the turnover of digital financial assets. The state in the conditions of international sanctions needs to create a new mechanism for the functioning of the financial system of the Russian Federation. Cross-border financial transfers are becoming a necessity that can be implemented only through the introduction of blockchain at the official level as a technology that can change the speed and quality of the functioning of the financial system. The digital ruble is the basis for the implementation of the global financial objectives of the Russian Federation.

Risk Spillovers in Global Financial Markets: Evidence from the Covid-19 Crisis

Risk Spillovers in Global Financial Markets: Evidence from the Covid-19 Crisis