Government Debt Securities Research Articles

Equity Market Pricing and Central Bank Interventions: A Panel Data Approach

This paper analyzes the effects of central bank interventions via large-scale purchases of government debt securities on the pricing of stock market indices. This study examines the effects of changes in the size of the Federal Reserve’s balance sheet in three intervention scenarios: during the 2008–2013 period, the 2020–2022 period, and in the years between by using the instrumental variables three-stage least squares (3SLS) method for a time series approach, and calculates the effects of these interventions on each index in a fund of funds setup using the panel data strategy. This study confirms that large-scale purchases of government debt securities in response to the Great Recession and COVID-19 crises influenced the pricing of equity markets via their effect on the pricing of treasury bonds, with different degrees of sensitivity of each index to the effects on yields. Although the findings apply to the U.S. market, the results indicate that the pricing of small capitalization indices such as the Russell 2000 are less sensitive to changes in treasury yields caused by central bank interventions than large capitalization indices such as the DJIA. This research contributes to the understanding of financial asset pricing, particularly by identifying price distortions within equity market portfolios.

Assessing the Impact of Federal Reserve Policies on Equity Market Valuations: An Instrumental Variables Approach

This study investigates the impact of Central Bank interventions on the pricing dynamics of select stock markets. The research utilizes the instrumental variables three-stage least square (3SLS) model approach. It analyses the effects of variations in the Federal Reserve’s balance sheet size across three distinct intervention scenarios: the 2008–2013 Great Recession, the 2020–2021 COVID-19 pandemic periods, and an overarching analysis spanning these timelines. Our methodology includes estimations of the Seemingly Unrelated Regression Equations (SURE), and the results are robust under the two-step Generalized Method of Moments (GMM). Our findings indicate that changes in the size of the Fed’s balance sheet correlate significantly with the pricing of principal U.S. equity market indices. This correlation reflects a time-dependent effect emanating from the Fed’s balance sheet expansion, marking a growing divergence between the adaptability of pricing mechanisms in equity and debt markets. Notably, the Federal Reserve’s interventions during the COVID-19 crisis are associated with an increase of approximately 0.0403 basis points per billion in treasury yields. This research makes a significant contribution to the understanding of financial asset pricing, particularly by elucidating the extent to which interventions in government debt securities engender price distortions in certain equity markets.

Inflation Hedge Abilities of Stock Returns Compared to Government Debt Securities in Egypt: Evidence from ARDL and NARDL Frameworks

Inflation Hedge Abilities of Stock Returns Compared to Government Debt Securities in Egypt: Evidence from ARDL and NARDL Frameworks

Unconventional monetary policy in the Euro area: Impacts on loans, employment, and investment

AbstractUsing a dataset of bank‐ and regional‐level data, we study the effectiveness and heterogeneity of the transmission mechanism of the ECB's large scale asset purchases (LSAPs) to the real economy. Our results indicate that banks more exposed to government debt securities had higher growth of loans and loans relative to total assets than less exposed banks after the asset purchase programme (APP), but not after the pandemic emergency purchase programme (PEPP). Furthermore, our results demonstrate that regions where banks are more exposed to government securities exhibit more favorable outcomes after the APP in GDP, fixed capital formation, unemployment, and compensation of employees than regions with less exposed banks, via the bank lending channel. We argue that banks' exposure to LSAPs targeted assets and their geographical location is an important factor determining the magnitude and heterogeneity of the portfolio rebalancing transmission mechanism to the real economy.

Monetary policy of the National Bank of Ukraine: radical changes are needed

The article analyzes the effectiveness of the NBU's monetary policy. During the period of independence, the National Bank never performed any of the functions stipulated by law. The main instruments of monetary and credit policy at the disposal of the central bank are not used as intended, and therefore do not ensure the performance of the functions entrusted to the National Bank of Ukraine, in particular: they do not ensure the stability of the hryvnia exchange rate, price stability, accelerated socio-economic development of the state and the adopted inflation level. The monetary and credit policy of the National Bank must be radically changed to ensure the implementation provisions of Art. 6 of the Law of Ukraine ‘On the National Bank of Ukraine'. The central bank's efforts must be coordinated with the government's efforts, and the central bank's monetary policy must be coordinated with the government's fiscal policy. In the paper, we propose to change the monetary policy instruments of the NBU in order to direct it to the support of the real sector of the economy and the stability of the exchange rate. The proposed changes provide for the establishment of refinancing rates up to 2%, placement of deposit certificates -2% (minus 2%). At the same time, it is necessary to make changes to the Tax Code of Ukraine regarding the introduction of progressive floating rates of taxation of the profit of financial institutions, limitation of the right to deduct losses from the tax base of financial institutions in certain cases. . . For the actual production of goods with a high added value, provide the reduction of the tax base for the part invested in production, and set the tax rate for the distributed part of the profit at the level of the personal income tax rate. Non- traditional methods of stimulating development are also proposed, in particular the purchase of government securities. The marginal value of government debt securities should be limited to 2-3% of GDP.

Specific features of the financial system of Ukraine in the conditions of war

The impact of a range of factors on the country’s financial system, primarily related to the war, determines the relevance and importance of conducting this study. In modern conditions, the sphere of finance is transformed and adapted, therefore the purpose of this study was to investigate the current state of the country’s financial system in the context of the functioning of its main structural elements. The methodological basis of this study included the use of both general scientific methods, such as analysis, synthesis, comparison, comparison, and specific methods. To detect existing trends and processes in the financial system of Ukraine, statistical methods of dynamic and structural analysis were used. The study used a complex approach to the investigation of the financial system, specifically, the budget sphere, the banking system, the securities market, and the currency sphere were analysed. The main processes that affect the formation and implementation of the revenue and expenditure part of the state budget have been identified. The volume of tax revenues and their share in the formation of state budget revenues in the pre-war and wartime periods were compared. The main reasons for the growth of the budget deficit have been identified. The key sources used to cover the deficit were highlighted. The state of the national securities market was described based on the analysis of the structure of trade transactions in terms of financial instruments. The study found that the main share of trade transactions takes place with government debt securities. The banking sector, the financial system of the country, based on indicators of liquidity and profitability, was studied. Using the stability rating of banking institutions, it was found that leading positions in it are occupied by financial institutions that have foreign sources of financing, as well as state banks. The dynamics of devaluation of the hryvnia with the dynamics of inflationary processes were investigated. The results of the study allow for a comprehensive assessment of the current state of the country’s financial system and will be useful both to actors in the country’s financial sector and to managers who determine the basis of its functioning

Theoretical foundations and practice of the actions of governments and central banks in the conditions of war: historical excursion and Ukrainian experience

The object of research is the current global experience of regulating the financial sector and financing the costs of military actions of countries that were at war. This experience is compared in the work with those measures that were used by the government of Ukraine during the russian-Ukrainian war. In the conditions of war, the problem of financing war expenditures and balancing the budget for uninterrupted implementation of social payments is particularly acute. A sharp imbalance of the country's budget in the direction of financing military expenses and a drop in GDP, as a result of military operations on the territory of the country where military aggression is taking place, requires adequate actions of both regulatory and investment nature from the government and regulators. The timeliness and adequacy of such actions is a practical and scientific dilemma, the solution of which lies partly in the world's historical experience. The work proves that the actions of the Ukrainian government and the National Bank of Ukraine during the active phase of military aggression on the part of russia fully correspond to modern theoretical and methodological achievements in the organization of financing the defense expenditures of belligerent countries. Ukraine is using almost the entire arsenal of possible financing options: reducing non-military spending, increasing government borrowing, and issuing money. The study of the role of expenditures to fill the budget demonstrated the reduction of the role of taxes as a lever for financing the growing expenditures of states on defense. Coordinated actions of the Government of Ukraine and the National Bank of Ukraine prevented a sharp outflow of foreign capital from the country and preserved the purchasing power of the national currency. This is explained by the timely application of historical experience, tools of the classic Lucas-Stokey model with skillful manipulation of government debt rates in order to interest investors in long-term investment in government debt securities, and unprecedented financial assistance from foreign partners.

ДЕРЖАВНІ ОБЛІГАЦІЇ ЯК ІНВЕСТИЦІЙНИЙ ІНСТРУМЕНТ В ПЕРІОДИ ФІНАНСОВОЇ НЕСТАБІЛЬНОСТІ

The war in Ukraine led to the disruption of the stability of money flows both at the microeconomic and macroeconomic levels. The financial sphere was particularly vulnerable to internal and external shocks. In this vein, the question of investing in government bonds is relevant, which, on the one hand, is necessary for the state, and on the other hand, is beneficial for investors. Issues of public debt management are directly related to the development of the securities market. The effectiveness and investment attractiveness of government bonds directly depends on the level of development of the securities market and the segment of government debt securities. The purpose of the article is to study the theoretical and practical aspects of investing in government bonds in Ukraine with emphasis on the period of financial instability caused by the war. For this purpose, the article examines the regulatory and legal principles of investing in government securities and defines the subjects of such investment. The advantages of investing in government bonds for investors and for the issuer are determined. The key for the issuer is continuous access to sources of loan capital and the ability to promptly attract financial resources to the state budget. At the same time, emphasis is placed on the fact that investing in government bonds supports the securities market, especially in a period of financial instability, which is marked by a decrease in market capitalization. For an investor, the advantages of buying government bonds are high yield, diversification of the investment portfolio and low risk of such transactions. The analysis of investment supply and investment demand for government bonds of Ukraine was carried out with the help of statistical indicators. In particular, the dynamics of indicators of the share of the State God of Ukraine, which was formed due to the sale of government bonds, were analyzed; bond yields of Ukraine (on the example of 10-year bonds), as well as the specific share of entities investing in government bonds of Ukraine. It was concluded that in order to intensify investment in government bonds of Ukraine, it is necessary to achieve prerequisites that will contribute to the creation of an efficient market of government securities.

РИНОК ДЕРЖАВНИХ БОРГОВИХ ЦІННИХ ПАПЕРІВ ЯК МЕХАНІЗМ ФІНАНСУВАННЯ БЮДЖЕТНОГО ДЕФІЦИТУ

The military invasion of Russia on the territory of Ukraine caused a number of negative con-sequences for the economy. The state of Ukraine's economy has a direct impact on the balance of the state budget. Today, this is reflected in the growing budget deficit. The shortage of financial resources of the state became the reason for the search for potential on the domestic and foreign markets. The securities market is a platform for the formation and distribution of loan capital in any country. At the same time, a separate segment is formed that serves the state and attracts financial resources. This segment is called the market of government debt securities. The article describes the functions performed by this market, in particular: mobilizing, investment, transformational. Among the instruments circulating in this market are government bonds and treasury bonds. Do-mestic state loan obligations are one of the outcomes of the financial instruments market. The trade in such securities was analyzed in terms of investment subjects. Also, indeed, an assess-ment of the circulation of military obligations. The market of government debt securities actually covers the entire securities market in Ukraine. In general, this allows financing the needs of the state and is positive. However, without other segments, it is not sufficiently developed. The evalu-ation of the key indicators of the state securities market made it possible to single out key problems, including: mistrust of foreign investors; narrow selection of financial instruments; speculative ac-tions of unscrupulous investors; decrease in the level of income of the population, etc. We consider the following to be the main ways of activating the market: carrying out new ones related to the revision of the regulatory framework and, accordingly, bringing it into line with the norms of international standards reforms; strengthening control and review of the market, including the avoidance of speculative transactions; maturity dates for bonds and others.

ПОДАТКОВА АМНІСТІЯ В УКРАЇНІ: ОСОБЛИВОСТІ ЗДІЙСНЕННЯ ТА РЕЗУЛЬТАТИ

The article is devoted to the study of the peculiarities of tax amnesty in Ukraine. In the course of the research, it was found that tax amnesty is not only a need for the socio-economic life of society, but also the implementation of the pre-election program of the current government. It is emphasized that this is the first comprehensive attempt to implement tax amnesty in practice as a tool of financial and tax regulation of the economy. The classification of amnesties in economic activity (tax amnesty, capital amnesty, economic amnesty) was carried out and it was concluded that the Ukrainian version of the amnesty belongs to economic amnesties. The experience of the most successful foreign countries in this field (Indonesia, Argentina, the Republic of Kazakhstan, Italy) was studied. It has been established that world practice proves that the economic benefit of the state during the amnesty can be realized in 3 main ways: depositing legalized funds by declarants in interest-free deposits in state banks for a specified period of time; payment of a one-time tax, which is either equal to the basic rate of income tax, or, as is very often the case in practice, much lower (by 2–3 times) than the basic level; the purchase of government debt securities (usually bonds) with a long period of rotation on the conditions of the absence of fines or the payment of a fixed tax at a small rate. The fiscal, regulatory, investment and social functions of the tax amnesty are characterized and the characteristic features of its implementation in Ukraine are summarized. The opinion was expressed that, despite possible positive benefits in the course of the tax amnesty, it contradicts certain provisions of the Constitution of Ukraine and the principles of taxation, which are reflected in the Tax Code, and may lead to negative expectations among domestic businesses. It was found that according to the results of the tax amnesty, it cannot be considered successful, taking into account the financial expectations that were at the beginning of its implementation and the actual results achieved. this is a long-overdue objective process that requires its implementation in Ukraine. It was concluded that, despite the urgent need to hold a tax amnesty in Ukraine, the failure was due to the incorrectly chosen time of its holding, which fell on the period of the active phase of Russian aggression; lack of significant changes in the current fiscal legislation, trust in the domestic judicial system, effective fight against corruption; conducting active public outreach work among society.

Impact of Financial Benchmarks Upon the Portfolio Distribution of Mutual Funds: The Evidence from Turkish Capital Market

The purpose of the study is to examine how financial benchmark returns impact the portfolio distribution of mutual funds. The scope of paper is limited to Turkish mutual funds market. Method employed in the paper; Granger Causality Test based on the VAR model is used. Findings of the quantitative analysis: As the return on government debt securities (index) inclines, the demand on Government Domestic Debt Securities goes up, and then, weight of government debt securities increases in consolidated portfolio of mutual funds. The paper concludes that for bonds, benchmark returns are effective on portfolio distribution of mutual funds.

Bond Market Development in Bangladesh: Prospects, Challenges and Required Actions

Purpose – The purpose of this study is to focus on the present scenario of the bond market in Bangladesh and to explore prospects, challenges, and required actions to expand the market to support the growing economy and make it compatible globally. Design/methodology/approach – The qualitative research method is used for collecting and analyzing secondary data from different journals, news articles, working papers, conference papers, regulatory reports, etc. to focus on the existing bond market of Bangladesh and to find out challenges and scope for further development while recommending required actions through narrative inquiry. Findings – The bond market in this country is in a very niche phase compared to the global bond market as well as the Asian bond market, though the economy is booming. The bond market of our country is dominated by government debt securities rather than corporate debt securities. As of 2021, Bangladesh's bond market size stands at $18 billion compared to the global bond market size of $124 trillion. And compared to some East Asian and South Asian countries, the bond market size of Bangladesh is very low through percentage analysis of GDP. Study limitations – Only secondary data is evaluated and scrutinized for this study. Practical implications – For Bangladesh, the creation of the debt market is essential to build an efficient and compatible capital market. Other than the equity market, various financing vehicles need to be created and different financing modes need to be opened by the government or any other public and private concern for the development of mega infrastructural projects. Nowadays, to minimize the budget shortfall to undertake such mega projects, borrowing from the banking sector becomes essential. On the other hand, this market would also create an opportunity for investors as an alternative investment vehicle. Originality/value – This study focused on the current bond market scenario in Bangladesh and showed a comparative analysis of the bond market portfolio of our country with developed countries and other developing countries. The prospects and challenges of expanding the existing bond market and required future actions to build an effective bond market in Bangladesh are also recommended in this study.

How to Salvage the Devalued Deposits of Russian Citizens

ABSTRACT Revitalizing capital investment via the monetary resources of Russian citizens is a major factor of the socioeconomic and innovative development of the country and would reduce Russia’s dependence on foreign capital. To achieve this, it is necessary to compensate, revalue, and restructure the savings of citizen, which have been devalued after being deposited in the government-owned Sberbank. The article describes how the reimbursement of citizen savings has been addressed by the government thus far and considers how lost savings can be restored (e.g., through the issuance of government debt securities). We conclude that the first priority of restoring the devalued savings should be to establish the specific and legal amount owned to each depositor (e.g., in the form of targeted debt obligations).

ЕФЕКТИВНІСТЬ ФУНКЦІОНУВАННЯ ГРОШОВОГО КАНАЛУ МОНЕТАРНОЇ ТРАНСМІСІЇ В УКРАЇНІ

The article provides a comprehensive analysis of the monetary channel of monetary transmission in Ukraine in 2005–2021, identifies tools and mechanisms for its use, and describes the specifics of functioning in the monetary regulation of the economy in political and economic instability. It is proved that in the conditions of Ukraine the monetary channel of monetary transmis-sion plays an important role in the system of monetary regulation of the economy, and the main purpose of its use is to ensure optimal proportions between supply and demand of money and balanced money market development. It is determined that in 2005–2021 the efficiency of the monetary channel of monetary transmission in Ukraine was low, and its operation was subject to the use of mainly interest, currency and credit channels. It is substantiated that the main reasons for the inefficiency of the monetary channel of monetary transmission were the central bank's underestimation of the role of the monetary channel in the monetary regulation of the economy, unbalanced structure and dynamics of the monetary base and monetary aggregates, and low money multiplication rate. It is proved that the dynamics of monetary aggregate M3 had the most significant impact on the growth rate of real GDP in the analyzed period. It was found that the influence of the dynamics of monetary aggregates on curb-ing inflation was insignificant, which corresponds to the provisions of the theory of "money neutrality". Based on the analysis of the practice of using the monetary channel of monetary transmission, three cycles of monetary and macroeconomic dynamics are distinguished: 1) 2005–2009; 2) 2010–2015; 3) 2016–2021, their features and the nature of the relationship between the studied indicators are determined. It is proved that in the conditions of complicated economic development it is necessary to change the approaches to the mechanisms of monetary transmission monetary channel by strengthening its role in forming the main monetary proportions and increasing the coordination of monetary and fiscal policy, in particular, in issuing and trading government debt securities, public debt service and state budget deficit. It is argued that in the medium term the growth rate of the monetary base and monetary aggregates should be as consistent as possible with the dynamics of real GDP and the ability to curb inflation, and the rate of return on domestic government debt should not exceed the base interest rate. Priority measures to improve the efficiency of the monetary transmission monetary channel in Ukraine should be: strengthening the stability of the banking system, balancing the supply and demand of money, improving methods of forming the volume and structure of monetary base and monetary aggregates, and improving monetary and fiscal policy coordination. implementation by the central bank of a balanced monetary policy adequate to real economic conditions.

АНАЛІЗ ДІЯЛЬНОСТІ СУБ’ЄКТІВ РИНКУ ОБЛІГАЦІЙ ВНУТРІШНЬОЇ ДЕРЖАВНОЇ ПОЗИКИ УКРАЇНИ

Debt securities, namely domestic government bonds have become the most in demand after of all securities on the market in recent years. The current state of the government bond market requires systematic research and analysis given the role of these financial instruments in the debt and investment policy of the state as well as the identification and delineation of the main characteristics of the domestic market of domestic government bonds. The aim of the work is to study the dynamics of the domestic market of domestic government bonds, their profitability, the structure of market participants, the characteristics of their investment activities as well as to determine the prospects for development of this segment of the securities market in modern conditions. In order to achieve this goal, the following tasks were outlined: to identify the subjects of the domestic government bond market of Ukraine; outline the key problems facing the domestic securities market; to present proposals and recommendations for solving or at least localizing the problems that arise in the securities market of Ukraine. The article identifies the main subject in the market of domestic government bonds in Ukraine and explores their activities during 2017–2021. During this period in the unstable political and economic situation in the country was observed a constant growth in sales of government debt securities. The reasons that led to significant changes in the activity of investors operating in this market have also been identified. The article analyzes the activities of individual participants in the government bond market establishes the structure of their market share, outlines the reasons that contribute to the growth of their activity in the market or vice versa – encourage its folding. The volume of the portfolio in securities of Ukrainian banks and their share in total assets is determined. An analysis of the weighted average profitability on government bonds placed in national and foreign currencies. The characteristic features of the domestic market of government bonds and the main reasons hindering its further development are highlighted.

Directions of government debt securities market development

The securities market is a powerful platform to accumulate capitals for further investment in favor of structural reconstruction of economy, increasing population welfare level at the cost of fund financial instrument holding. As one of financial instruments the government debt securities gained widespread use as reliable, easy-to-use and readily obtainable financial assets. The place of bonds of domestic government loan in the formation of Ukraine’s public debt and financing of the state budget deficit is highlighted in the article. The modern statistics confirms the safety and viability for the use of internal government debt securities, and the author in made research proves significant increase of amounts attracted to budget financial fund from Ukrainian domestic government bonds settlement. The article systemizes the data on main indicators of the domestic market of Ukrainian domestic government bonds, determines the portfolio structure on the basis of ownership and describes ways to expand range of potential investors, for example, by involving physical entities. Several banks – primary dealers were chosen to analyze the purchase terms of Ukrainian domestic government bonds for citizens of Ukraine on the primary market. The directions of developments of domestic internal bet market was determined, and they are to strengthen communication with fund market participants, to concentrate liquidity in certain instruments, to protect investors multilateral trading systems, to make pricing transparent on the Ukrainian domestic government bonds market, to arrange auctions regularly, diversification of foreign currency debt structure portfolio etc. The well-structured process of Ukrainian domestic government bonds emission in the part of public debts management strategy will allow to hold investors with such investment time frame interested to obtain instruments in the mid-run.

The Sovereign-Bank Nexus in the Face of the COVID-19 Pandemic Outbreak—Evidence from EU Member States

The major focus of this paper is on the sovereign–banks relationship following the COVID-19 pandemic crisis outbreak, with a view to gaining an insight into banks’ exposure to the sovereign. We rely on a series of complementary research approaches, such as desk research, comparative statistical analysis, exploratory learning algorithm, and a deterministic panel regression framework. The analysis reveals that most EU countries were not prepared for the pandemic crisis as they lacked a financial security buffer. The growing fiscal pressure and lockdown restrictions additionally resulted in an increase in banks’ exposure to the government debt market and higher government debt securities exposure on their balance sheets. One of the novelties of the research is the adoption of the gap method in order to measure the changes between banking assets major items (government securities vs. loans) and uncovering the preference for holding a specific type of asset. Additional insight is brought by the clustering solution, which shows increased cross-country heterogeneity in terms of the sovereign–banks relationship. Empirical research shows that banks’ involvement in the sovereign debt market is sensitive mainly to negative information related to pandemic occurrence and, to a lower extent, to positive information reflected by government’s reactions and economic stimulus measures. In addition, our results reveal there is no crowding-out effect triggered by the pandemic, in terms of lending to the sovereign against lending to the real economy. In the pandemic onset banks did not proceed to a sharp portfolio rebalancing in favor of the sovereign.

Detection of price bubbles in Istanbul housing market using LSTM autoencoders: a district-based approach.

Since the early 2000s, there has been a long-term price increase trend in the Istanbul housing market, and this situation also has led to price bubble speculations. Since the housing sector was caught with a high level of unsold housing stock to the economic slowdown emerging in the second half of 2018, housing price bubble speculations have increased even more, especially for the Istanbul market. In this period, housing loan interest reduction campaigns were implemented by the government through state banks to stimulate the housing demand, and a probable collapse in the housing market was prevented. On the other hand, house prices continued to rise during this period due to the stimulated demand. In this paper, we perform a price bubble research on the selected districts in the Istanbul housing market over the 2007–2019 period using LSTM autoencoder model. The first analysis on monthly data is performed by using housing price index, housing rent index, consumer prices index, stock market index, return on government debt securities, USD/TRY exchange rates, BIST price index, monthly deposit interest rates, mortgage interest rates and consumer confidence index, and the second analysis on quarterly data is carried out by adding building construction cost index and GDP data to the previous dataset. In the first analysis, the bubble formations differ regionally and periodically and disappeared toward the end of 2019 in some districts, while in the second analysis, the housing bubble formations have a more common and continuous appearance. Experimental results show that LSTM autoencoder model can be used to detect housing bubbles effectively.

The Effects of Government Bonds on Liquidity Risk and Bank Profitability in Cape Verde

To analyze the effects of government debt securities on the liquidity risk and profitability of banks in Cape Verde, this research employs an unbalanced panel dataset from 2000 to 2017 on the activity of all commercial banks operating at the end of 2017 (seven in total). The study employs models with lagged regressors, estimated by the ordinary least squares estimation method. The results show that government debt securities have no effect on bank liquidity risks, but they have an effect on bank profitability, with government debt securities having a positive impact on assets’ profitability, in the long run. When government debt securities include Consolidated Securities of Financial Mobilization, the effects on profitability are negative both in the short and the long run. The study concludes that banks’ strategy to hold the more conventional government debt securities as safe assets and risk-free alternative for the domestic application of liquidity surpluses is appropriate and a viable way to gain profitability in the long run. These results show the negative effect of government debt securities when the Consolidated Securities of Financial Mobilization are included, which helps to explain the low average profitability rates of Cape Verde’s banks, when compared to other similar sub-Saharan African countries, like Mauritius or Seychelles.

РИНОК ДЕРЖАВНОГО БОРГУ ТА ІНСТРУМЕНТИ ФІНАНСУВАННЯ ДЕФІЦИТУ БЮДЖЕТУ

The purpose of the study is to substantiate the need to determine the essence and place of the public debt market in the financial market. Achievement is ensured by the implementation of tasks: systematization of views of domestic and foreign scientists on the essence of the place of public debt in the classification system of financial market segments; study of the structure of the financial market in terms of segments that ensure the implementation of debt financing of public debts; development of a theoretical approach to the structure of the public debt market. The article considers and systematizes the views of scientists concerning the place of the state morgue market in the financial market. The article substantiates the need to supplement the classification features for financial market segmentation in terms of complementing the target of market participants and identifying segments: the market for attracting financial resources to cover the state budget deficit (public debt market); the market for attracting financial resources to increase private capital. The concept of the public debt market is defined and its structure is proposed in general and detailed form. In general, the structure of the public debt market covers the debt securities market and the external credit market. The government debt securities market is a segment of the securities market, which in turn can also be classified. The same can be said about the external segment of the credit market. However, if the government debt securities market is fully owned by the public debt market, then the external segment of the credit market is only partially owned. The detailed structure of the public debt market is also presented. Conclusions are drawn and the directions of further scientific research in this direction are indicated.