International Financial Activities Research Articles

Priorities and movement vectors for further development of the foreign exchange market of Ukraine

Introduction. Ukraine continues to work on strengthening the role, importance and participation in European integration processes, improving the image of the national currency and stabilizing its exchange rate. In order to continue to be a participant in international trade operations, it is necessary to continue to form an effective foreign exchange market, because its normal functioning is an important component of the further development of the economy of Ukraine. Even under difficult modern conditions, international financial activity remains an important factor that determines the development of the currency market of Ukraine today and affects the ecosystem. Only thanks to external support, it is possible to stabilize and balance the currency market in the country. Purpose. The purpose of this article is an attempt to analyze the current state of the foreign exchange market of Ukraine in order to identify the main priorities and movement vectors for the further development of currency policy, in particular in the field of exchange rate regulation and to determine the main criteria for choosing the most appropriate currency regulation regime at this stage. Methodology. In the process of work, methods of analysis and synthesis, generalization and comparison, and scientific abstraction were used. Results. This article summarizes some analytical data on the peculiarities of the current state of the currency market of Ukraine as a component of international economic relations and the impact of the war on it and a number of negative factors caused by it. The article also highlights a number of problems of both stabilization and development of the foreign exchange market of Ukraine and describes the policy of the National Bank of Ukraine to overcome them and outlines the ways to international cooperation and support as a key aspect of overcoming modern threats in the specified sphere. The article also recommends ways to develop the foreign exchange market and provides certain measures to eliminate existing threats in view of state policy and the work of relevant financial institutions. It also outlines the activities of the mono-regulator in the field of international cooperation with financial institutions and institutions with the aim of establishing support for the world and international financial institutions for the regulation of the foreign exchange market according to all key criteria of its development.

Transformation of international financial centers in global economy

The article considers approaches to the interpretation of the concepts of «financial center» and «international financial center». On the basis of this, the original interpretation of the concept of «international financial centers» is presented, which is defined as hubs of the international financial network in the form of a set of institutions of different jurisdictions that carry out international transactions, provide financial and other support services to clients around the world. This makes it possible to manage international financial flows, to serve the accumulation and distribution of capital at the global level. It is concluded that their importance for the global economy is to ensure stability and liquidity of the global financial market by redistributing international financial flows. It is marked that their feature and difference from the financial centers of national level is a presence of the ramified network of mediators for the sake of maintenance of the international acceding to the orientation on clients outside the country of basing. The advantages of hosting international financial centers for the country of location are determined. Thus, the creation and development of international financial centers helps to attract financial capital, increases the investment attractiveness of the host country and provides it with other economic and social benefits. The changes in the development index of the TOP-10 international financial centers (for 2022, 2014 and 2006) are analysed. New York, London, Singapore, and Hong Kong retain their leading positions in the TOP-10 during the analysed period. The existence of significant competition from financial centers for global leadership has been determined, which is explained by a slight gap in the ranking of the TOP-10 city-centers. It is noted that from the point of view of the global economy and influence on the world financial market, financial centers that are classified as global rather than international come to the fore. The directions of transformation of international financial centers in the context of globalisation are identified. It is noted that their role is changing due to the emergence of financial centers of global influence, innovative models of international activities, introduction of digital innovations and improvement of the regulatory framework for international financial activities.

Spillover effect of crude oil futures market: An empirical research from emerging market

The world crude oil market is an important place for investors to engage in international financial investment activities, which profoundly impacts the economic activities of all countries. This paper aims to provide empirical support for the decision-making behavior of cross-border enterprises, international investors, and government regulatory authorities. This paper constructs a risk spillover effect measurement model based on the GARCH-CoVaR model. Firstly, the GARCH model fits the logarithmic rate of return of RMB and crude oil price data. Secondly, Copula is used to estimate its joint distribution. Finally, the risk spillover effect is calculated by the Covar model. We selected the emerging market (Shanghai crude oil futures market) as the research object. The research found that the Shanghai crude oil futures market has a significant inverse volatility spillover to the onshore exchange rate market and a two-way positive volatility spillover to the offshore exchange rate market; Then, we conducted a robustness analysis and found that there is a significant two-way risk spillover among offshore exchange rate market and international crude oil market, and there is a downward risk spillover among international crude oil market and onshore exchange rate market.

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.

FORMATION OF INTERNATIONAL COMPETITIVENESS AND BUSINESS MODELS

International competitiveness is an integrative concept that unites the whole range of key issues related to the sustainable growth of national welfare and living standards.The aim of the work is to determine the essence of modern understanding of economic competitiveness, features and factors influencing it both externally - from the world economy and internal, directions of competitiveness theory, as well as to develop an author's concept of assessing competitive business advantages of developing economy. natural resources, and determining the most effective strategy to increase the level of competitiveness of the economy and business.The article systematizes historical and modern theoretical approaches to the analysis of competitiveness at the macro level and the existing applied methods of calculating international competitiveness. The priority models of the European concept of innovative business development are considered in detail: business model №1 - creation of investment institutions that stimulate the subjects of international financial, scientific and industrial activities to innovate; business model №2 - creating a favorable environment for an innovative economy; business model №3 - development of humanitarian capital and formation of a general innovation culture in society.It is proved that competitiveness is a complex concept that is determined by many factors, the most acceptable way to assess the level of competitiveness is to use multidimensional or composite indicators of competitiveness.

Розробка методики оцінювання ефективності підрозділів закладу вищої освіти

As a result of reviewing the scientific literature, studying the legal framework, analysis of socio-economic conditions, modern practice of higher education institutions management, a contradiction was found between the high requirements for free economic management and the lack of criteria for evaluating its effectiveness on the basis of innovative technologies. This contradiction can be resolved by developing appropriate models and methods for evaluating the work effectiveness of higher education institutions. In this case, the method should be based on the results of the basic structural unit of the institution of higher education, meaning the department. The purpose of the work is to increase the informativeness of assessing the effectiveness for departments of higher education institutions by determining comprehensive performance indicators through the methodology of public funding distribution. The methodology is based on the principles of financing higher education institutions introduced by the Cabinet of Ministers of Ukraine. In order to create a methodology for assessing the quality of a higher education institution functioning, a set of criteria for assessing the education quality in higher education institution, the quality of scientific and international activities and financial activities were considered. The developed methodology allows to determining complex performance indicators through the method of public funding distribution, which operates with the following data: indicator of the estimated contingent of higher education; indicators of average competitive scores of entrants to study at the bachelor's and master's levels of education; an indicator of the scale of a higher education institution activity; indicators of personnel of scientific and pedagogical workers; indicator of a money amount from scientific works; students-winners indicators of a student scientific works competitions and Olympiads; an indicator of the publications number and citations according to the scientometric databases Scopus and Web of Science, meaning the international recognition for employees of higher education institutions. The formed methodology can be used by the administration of a higher education institution to calculate possible funding for the next year, determine the amount of funding for its departments, and so on.

The Deviations in Financial Risk Correlations, and Some Analyses to the Banking Risk Governance after 2015

In this study, we aimed to discuss the institutional risk dimension of financial risk elements within the global process on the basis of both EU banks as primary financial institutions and structural global financial risk correlations. In this context, determining the institutional risk impact levels of banks, which are important financial risk sources for EU and the other countries, has revealed the primary purpose of our study. On the other hand, the analyses of the structural-institutional management effects of financial crisis management on a global ground express the unique aspect of our study. Structural institutional arrangements and the analysis of international financial activities in the financial risk management process have also revealed important criteria for determining corporate performances. In addition, the developments in bank loans since the crisis have been found meaningful in terms of our study, which's as an impact level of the corporate financial structures and how it creates a component balance in terms of financial crises. Although it has an indirect impact on our work, it has been understood that also the financial developments in the overall bank credits since the crisis have been taken as a meaningful part in our analyses intended to put forth institutional financial risk governance. Keywords : EU Countries, Financial Developments, Financial Risk, Financial Rask Governance, Institutional Standards. JEL Codes: G01, G14, G15. DOI: 10.7176/RJFA/11-10-12 Publication date: May 31 st 2020

An Economic and Philosophical Critique of the “Beauty of Finance”

The “Beauty of Finance” refers to the aesthetic experience in discovering the hidden symmetry of finance, and it particularly offers help to the creative understanding of the allocation of economic resource and the creation of life necessities. The term was first proposed by Robert J. Schiller in his book Finance and the Good Society. The “Beauty of Finance” involves three characteristics: promoting human being’s pursuit of new freedom, seeking the maximum share of wealth by enhancing close connections through “married deals”, and achieving social diversity through serving both personal and social needs. Whereas the finance presents its beauty, it also cannot avoid the impact of evil. Capitalism reproduction is closely related to the elitism of power both logically and historically, and the space-temporal field in the capital financial power system which functions as a realistic product of capitalist reproduction is hard to be promoted in the elites’ spiritual creativity. Moreover, there is a positive feedback between the totality of the space-temporal field and the elitism of power, because the market power owned by elites promotes the formation of the capital financial power system as follows. The financial practitioners form the visible carrier of capital, their moving and marrying activities form the visible flow of capital, and the international capital financial power system constitutes the overall framework of the invisible modern international financial activities, thus maintaining the hidden chains between creditors and debtors and forming the invisible soul of capital power.Three dimensions mentioned above is hidden by the triple theoretical dilemma in the “Beauty of Finance”: the concentration of capital power and high capital return under the law of profit rate decline; social wealth division between the capital accumulation and poverty accumulation; the financialized world as a world of financial colonization in essence. Financial colonization is further embodied in the following three aspects: capital plunders the resources of less developed and underdeveloped countries and regions; capital plunders social labors in labor-intensive industries; and capital plunders labor force in labor-intensive countries and regions. Therefore, financial colonization is essentially a domination of international capital financial power over the living world. In a deep level, Schiller’s “Beauty of Finance” demonstrates an illusion. Nevertheless, we agree with Schiller’s view, as it reveals the deep contradiction in the financialized world. Building a highly adaptable, competitive and inclusive modern financial system needs the aesthetic negation of finance, and only by this can our international capital and financial power system in the 21st century sail out with Chinese characteristics.

The stakes of global venue shopping: examining bank lobbying in the Basel Committee and the European Union

The galloping pace of globalisation has not only led to the expansion of firms across national borders and an exponential increase in the interdependency of international markets, but it has also triggered the development of the regulatory environment into a multilevel arena consisting of numerous and often overlapping and competing global institutions and regulatory jurisdictions. Our paper examines venue shopping at this global level. We argue that existing theories of multilevel venue shopping are not well suited to explaining global venue shopping. Advancing a novel theoretical framework, we argue that the decision to lobby multiple global venues is a function of the extent of firms’ international business activities and investments. We test this theory in the case of post-crisis banking regulation in the European Union and the Basel Committee on Banking Supervision. Assessing banks’ international activities in terms of the number, international scope, and geographical diversity of their subsidiaries, we find evidence supporting our argument. The new post-crisis banking rules posed a serious threat to banks’ international financial activities and banks facing the greatest costs of these new rules were also most likely to engage in global venue shopping.

Reoriented Investment Protocol – a Christian-ethical perspective on investments

The current state of economic globalisation and attendant cross border flow of capital and investments has spurred interest for what ethically sound financial practices, which are increasing among secular politicians, investors and academics, entails. Time may have come to address this state of international financial activity from a Christian-ethical perspective.Traditional approaches, both within secular and ecclesiastical communities, have been focused on what should not be permitted to invest in from a moral standpoint. Breaking with this tradition, the authors present a creative and constructive moral approach towards investment activity where focus is on how investments may contribute to society while promoting Christian values. This new investment methodology, Reoriented Investment Protocol (RIP), is based on the reformed paradigm. It attains a systematic approach where investors need to react in alignment with constructive scripturally based ethical guidelines rather than merely avoiding immoral practices. The central argument of the article is that investments are always value-driven and never ethically neutral, and thus that investment activity should be performed under sound moral guidance from scripturally based constructive Christian-ethical guidelines.

Euro Area Cross-Border Financial Flows and the Global Financial Crisis

This paper analyses the impact of the global financial crisis on euro area cross-border financial flows by comparing recent developments with the main pre-crisis trends. Two prominent features of the period of turmoil were (i) the sizeable deleveraging of external financial exposures by the private sector and, in particular, the banking sector from 2008 and (ii) the significant changes in the composition of euro area cross-border portfolio flows, as investors shifted from equity to debt instruments, from long-term to short- term debt instruments and from private to public sector securities. Since 2009 such trends have started reversing. However, as balance sheet restructuring by financial and non-financial corporations continues, cross-border financial flows have remained well below pre-crisis levels. The degree of resumption and volatility of crossborder financial activity may have a major bearing on growth prospects for the euro area and may also matter from a financial stability perspective. We argue that the recent experience, first of extraordinary growth and then of scaling down of international financial activity, calls for enhanced monitoring of developments in crossborder financial flows so that the underlying risks to the domestic economy stemming from the financial sector can be better assessed. Looking forward, successful implementation of policy actions to promote macroeconomic discipline and enhance financial regulation and supervision could influence, inter alia, the composition and volume of cross-border capital flows, contributing to a more efficient and sustainable allocation of resources. JEL Classification: D8, C7

Multilayered Governance in International Financial Regulation and Supervision

In recent decades, financial markets have become increasingly international in scope, while the focus of financial regulation and supervision has largely remained limited to the domain of national jurisdictions. This article applies the doctrine of multilayered governance to financial markets, thereby addressing the discrepancy between international financial activities and nationally oriented financial regulation and supervision. It identifies core values that are widely shared within the international community, including the regulatory goals of financial stability and market integrity and the importance of confidence in the functioning of financial markets. The article argues that the scope of financial activities, the importance of regulatory objectives and the level of detail could serve as criteria for assessing how financial regulation should be allocated to the different levels of governance. In the proposed setting, standards could be a key to establishing multilayered governance as they allow for flexible adaptation of internationally agreed rules to national or regional particularities. Regarding financial supervision, the article highlights the importance of supervisory colleges or peer review procedures as a layer in between nationally based supervision and international supervisory standards.

What is this thing called international financial law? Part 5

This is the final part of a five-part series where the author investigates the nature of International Financial Law (IFL). After discussing the multi-jurisdictional nature of IFL, and how this fundamental attribute determines many of its distinctive features as a legal discipline, previous articles touched upon many of the recurrent legal issues which professionals face on a daily basis in cross-border financial transactions, and the techniques that markets have evolved to deal with them. Any model of IFL needs also to take account of the impact of public law norms on international financial activity. Such is the concern of the present article.

Global Roles of Currencies

This paper presents a new concept - the global roles of currencies. The concept combines the domestic and international (cross-border) use of currencies and therefore captures the overall importance of different currencies in a globalised economy. The measure of a currency's global role is based on the size and stage of development of the underlying economy, as well as the size and stage of development of its financial markets and the scope of financial instruments available in this currency. The paper applies the concept to 22 currencies of advanced and emerging economies. The results confirm the well-known ranking for the leading currencies - in particular the US dollar and the euro - but give considerably greater weight to currencies of emerging economies than the results obtained from the international debt market, which has so far been used as the basis for measuring the international role of currencies in capital markets. The paper also discusses this established measure in detail, arguing that in view of financial globalisation, an indicator based on currency shares in the international debt market alone represents a decreasing share of international financial market activity, as this market excludes government debt, other domestic debt and equities, which are increasingly of interest to international investors. The paper also presents an empirical application of the new global concept to examine cross-border portfolio holdings in debt and equity markets across advanced and emerging economies. It finds that the global role indicator is positively correlated with such holdings and, especially for emerging economies, fares better than the established international debt market indicator. The findings suggest a positive relationship between domestic financial development and international financial integration.

Global Roles of Currencies*

AbstractThis paper presents a new concept – the global roles of currencies. The concept combines the domestic and international (cross‐border) use of currencies, and therefore captures the overall importance of different currencies in a globalized economy. The measure of a currency's global role is based on the size and stage of development of the underlying economy, as well as the size and stage of development of its financial markets and the scope of financial instruments available in this currency. The paper applies the concept to 22 currencies of advanced and emerging economies. The results confirm the well‐known ranking for the leading currencies – in particular the US dollar and the euro – but give considerably greater weight to currencies of emerging economies than the results obtained from the international debt market, which has so far been used as the basis for measuring the international role of currencies in capital markets. The paper also discusses this established measure in detail, arguing that in view of financial globalization, an indicator based on currency shares in the international debt market alone represents a decreasing share of international financial market activity, as this market excludes government debt, other domestic debt and equities, which are increasingly of interest to international investors. The paper also presents an empirical application of the new global concept to examine cross‐border portfolio holdings in debt and equity markets across advanced and emerging economies. It finds that the global role indicator is positively correlated with such holdings and, especially for emerging economies, fares better than the established international debt market indicator. The findings suggest a positive relationship between domestic financial development and international financial integration.

International financial remoteness and macroeconomic volatility

This paper shows that proximity to major international financial centers seems to reduce business cycle volatility. In particular, we show that countries that are farther from major locations of international financial activity systematically experience more volatile growth rates in both output and consumption, even after accounting for political institutions, trade, and other controls. Our results are relatively robust in the sense that more financially remote countries are more volatile, though the results are not always statistically significant. The comparative strength of this finding is in contrast to the more ambiguous evidence found in the literature.

Delving into Country Risk

Since the Latin American debt crisis of the early 80s, country risk analysis has accounted for a significant part of the work of research and risk management departments of banks, insurance companies, rating agencies, financial market regulators, and multinational companies. Country risk is a very broad concept, that includes sovereign risk, transfer risk, and other risks related with international financial activities. Country risk analysis requires delving into multiple fields, such as economics, finance, politics and history. This paper addresses the concept of country risk, the agents involved, the methods for assessing country risk, the payments crises, risk prevention, the assessment of country risk in the present world and the Spanish country risk regulation.

International Financial Remoteness and Macroeconomic Volatility

This paper shows that proximity to major international financial centers seems to reduce business cycle volatility. In particular, we show that countries that are further from major locations of international financial activity systematically experience more volatile growth rates in both output and consumption, even after accounting for domestic financial depth, political institutions, and other controls. Our results are relatively robust in the sense that more financially remote countries are more volatile, though the results are not always statistically significant. The comparative strength of this finding is in contrast to the more ambiguous evidence found in the literature.

La Banque d'Athènes, point de jonction entre deux outre-mers bancaires (1904-1953)

Two strategies of company development abroad are studied in parallel but too through their interaction. On one side an investment bank, Banque de l'union parisienne, extended its skills in commercial banking towards several foreign countries - besides its links with African affairs and international financial activities - among which was Greece ; it became the godfather of Banque d'Athènes and kept that role for half a century, down to 1953. It got inserted within money flows between Paris and Athènes (besides Adriatic Sea, towards Egean Sea, therefore), either infavor of permanent refinancing opérations, or for exchange operations or in order to accompany the financing commercial exchanges. Parallely Banque de l'union parisienne helped Banque d'Athènes to reinforce its activities within the range of its own overseas activities, towards Eastern Mediterranea and Egypt, towards Egean Sea and Black Sea flows, up to the Danubian area and Odessa, which constituted therefore a second overseas basis. The growth of that latter benefitted with its complementary interaction with the former, and this was the originality of that couple between a Paris commercial bank and an Athenien bank.

Géographie des activités financières internationales : Éclairages théoriques et tendances récentes

Location of international financial activities : theoretical findings and recent trends There has been a growing interest in international financial centres (IFCs) in recent years. Nevertheless, discussion usually focuses on the respective costs and advantages of the different centres. This papers offers theoretical insights on the geography of international financial activities and the function of IFCs. We refer to various models of competition between markets and economic geography and compare their results with recent developments in the international financial environment. Two trends are highlighted : first, the weakening of traditional barriers to concentration of capital markets and greater pressures on geographical concentration of financial activities in largest centres ; and second, incentives to separate geographically the production of international financial activities to exploit specific advantages of the various sites. JEL Classification : G10, R12