Monetary Regulation Research Articles

The Impacts of China's Shadow Banking Credit Creation on the Effectiveness of Monetary Policy

This paper researches the impact that shadow banking in China has upon credit creation and the potential effectiveness of monetary policy. Using a credit creation model, we derive the effect that shadow banking has upon the money multiplier and the money supply. The model shows that shadow banking can change the money multiplier, potentially increasing it during an expansion and decreasing it during a contraction. Introducing shadow banking in a CC-LM model results in a shift of the CC and LM curves resulting in a higher equilibrium output. A vector autoregressive model is used to empirically estimate the impact of shadow banking deposits' growth rate on the growth rates of the broad money supply, GDP, and the CPI. The results show that shadow banking's credit creation function in China has a pro-cyclical characteristic, potentially reducing the money supply's controllability and increasing the difficulty in effectively regulating monetary policy. This paper introduces shadow banking into the currency creation process of traditional commercial banks, accounting for the reserve requirement ratio, the excess reserve ratio, the shadow bank leakage rate, and the reserved deduction rate. Future research can determine whether coordinating monetary policy and leverage ratio regulation mitigates the impact of shadow banking. Another area of research is how the shadow banking of non-financial companies affect monetary policy.

Authority and Autonomy without Independence: The Gradual Institutional Change of the Chinese Central Bank

ABSTRACT The People’s Bank of China (PBC)has played an important role in China’s sustained economic growth. Despite its limited formal independence, PBC has developed considerable de facto authority and autonomy, referered to here as central bank discretion (CBD). This article offers a detailed historical account of how PBChas gained growing CBD in areas such as monetary policy, financial stability, foreign exchange and financial regulation. It also analyzes the main underlying forces that have contributed to PBC’s authority and autonomy.This study of CBD in China seeks to enrich the existing literature on the political economy of central banking, which has so far focused heavily on the concept of central bank independence (CBI).

MONETARY REGULATION IN THE ECONOMIC GROWTH OF A STATE

Abstract. In the article it is provided a comparative analysis of monetary regulation models and explores their impact on economic growth. The aim of the paper is to study models of monetary regulation and their impact on economic growth. It has been established that monetary regulation of any country in the world should be aimed at ensuring economic growth. The authors of the article proved that monetary regulation should be considered as a source of economic shifts, an increase in real wages and living standards accordingly; it acts as a measure of inflationary processes’ containment, which, in turn, meets strategic objectives of monetary policy. The study showed that the rapid development of monetary policy and economic growth theories is marked by certain contradictions, uncertainty and cross flows. The evolution of theories is represented by the Keynesian Liquidity Preference Theory, Monetarism, Neoclassical Real business-cycle theory, the Neo-Keynesian model, and the New Consensus Model. Each of the models has its own characteristics, based on the objects of monetary regulation (money supply, inflation, interest rates, exchange rate). Based on the analysis of the views of researchers on the impact of monetary regulation on economic growth, the authors concluded that concepts are divided according to those that characterize weak relations between these phenomena, and those that prove close correlation. It is concluded that the influence of monetary regulation on economic growth takes place when choosing the regulatory model itself and instruments for its implementation. It is proved that the model of monetary regulation should be based on developed monetary rules. The authors of the article proved that in Ukraine, in conditions of using a monetary design based on the inflation targeting regime and taking into account the importance of increasing the efficiency of using main instruments of monetary regulation, it is necessary, first of all, to ensure the consistency of monetary and fiscal policies. The coordination of monetary and fiscal policies should consist in developing and implementing them in such a way that they do not contradict each other and together contribute to the achievement of the common goals of economic policy, such as sustainable economic growth and low unemployment in terms of long-term price and external stabilities. It is concluded that the insufficient efficiency of the monetary transmission mechanism is reflected in the imbalance of money and foreign exchange markets, the deformation of the credit market and the credit climate degradation, and the decrease in the influence of monetary impulses of the central bank on both the financial system and the real sector of the economy. That is, the main problem of the significant influence of monetary regulation on economic growth in the country lies in restoring the effectiveness of the channels of the transmission mechanism of monetary policy, which depends on the choice of monetary design. Keywords: monetary design, economic growth, monetary instruments, monetary regulation, monetary rules. JEL Classification E50, 58; O49 Formulas: 0; fig.: 7; tabl.: 0; bibl.: 23.

ANALYSIS OF PECULIARITIES OF NATIONAL PAYMENT SYSTEMS FUNCTIONING AND CURRENT PAYMENT VOLUMES

Purpose of the study: In current conditions of globalization, the role and importance of non-cash payment systems have changed dramatically. The authors of the article are aiming to analyze and promote new banking products and describe the way of development of modern banking business trends in the field of electronic banking services in their article.
 Methodology: In the course of this study, methods of comparative and statistical analysis, empirical, interviewing, observation and economic, and mathematical modeling were used. 
 Main Findings: The Central payment systems of the Republic of Kazakhstan provides options for the needs of the real economy sector, financial markets, and banks the other participants in the late payments and money transfers, as well as contribute to the effective implementation of monetary policy and the execution of the state budget.
 Applications of this study: The theoretical and practical provisions of the research can be applied in the educational process in economic areas and banking organizations' activities. Calculations are a necessary accompanying element of the money supply's creation (withdrawal) as a derivative of money circulation and one of the monetary regulation's main objects.
 Novelty/Originality of this study: Development of theoretical provisions aimed to modernize the mechanisms of state regulation of the domestic national payment system. It ensures its further development in current conditions and the formulation of practical recommendations and justification of organizational tools.

SOME ASPECTS OF THE USE OF DISTRIBUTED LEDGER TECHNOLOGY (BLOCKCHAIN) IN RELATION TO REAL ESTATE TRANSACTIONS (CONTRACTS, ETC.): THE EXPERIENCE OF RUSSIA AND FOREIGN COUNTRIES

This article is aimed at identifying the approaches of a number of foreign countries that are being implemented to address the issues of using distributed ledger technology (blockchain) in relation to real estate transactions, and some aspects of the situation in Russia. The starting point of the research is the currently observed creeping networking - the establishment of non-market communication, which is beginning to replace purely monetary regulators in the economy, law and other spheres of the life of the society. In this format the article analyzes approaches of foreign countries that create patterns of permissibility and assent of different applications of distributed ledger technology (blockchain) in relation to real estate transactions (sale & purchase contracts, leases, etc.), the potential of such an application and the existing legal (including mentality, tradition, etc.) basis based on analytical reflections on the information gathered from sources and literature from the list of references. The author reveals the dependence of the permissibility (acceptability, acceptance, etc.) of using distributed real estate ledgers in foreign countries on the degree of involvement of the intermediary (Registrar of rights, etc.) in real estate transactions and the notary system in force in the country. The relevance, theoretical and practical significance of such a research is due to the fact that a number of approaches to legislation can be useful in finding answers to similar questions related to the understanding, development and adoption of a similar approach by our country, and the fact that this study serves to fill in the existing gap in the coverage of legal and other approaches of foreign countries in the field under study in the modern period. The author's results are presented among others in the idea that the more types of real estate registration in the countries under study are not required, the better space for implementing blockchain-based transactions will there still be. This prospect, however, is negated by the desire of the parties themselves to register transactions & contracts that according to law does not need any registrations in order to create a legal certainty regime for themselves.

INNOVATIONS IN THE FIELD OF LAND EVALUATION IN UKRAINE

Introduction. Modern socio-economic processes in the country, including the processes of decent-rallization of power, are closely linked to the formation of self-sufficient communities. Therefore, it is important to find effective own sources of economic development of communities. One of the sources of filling local budgets is the land tax, rent and payment for communal land plots during their sale, etc. The amount of the above payments is based on the results of the calculation of the monetary value of land. Therefore, the issue of unification of approaches to land valuation and implementation of valuation procedures remains relevant. In 2020, a new comprehensive approach to the calculation of the normative monetary valuation of lands of all forms of ownership and categories, regardless of their location (within or outside the settlements) is proposed. The purpose of the article is to study innovations in the field of land valuation as part of the formation of local budgets. Results. According to the results of calculations of the normative monetary valuation of four non-agricultural land plots within and outside the settlements, significant differences in the value of lands located outside the settlements were revealed, and the established fact of significant impact population in the settlements that are the administrative centers of the newly formed communi-ties, and the relatively small impact of the location of land plots on relatively large settlements. Conclusion. The results of the study prove the relevance of improving approaches to monetary valuation of land. The unified approach proposed in the draft methodology of 2020 has positive features, among which we can note: a simplified procedure for obtaining initial data for regulatory monetary valuation of lands of all categories of land, and the ease of application of geographic information technologies. However, a number of indicators need to be refined, such as the coefficient that takes into account the location of the community within the zone of influence of large cities (Km1), the coefficient that characterizes the zonal factors of land location (Km4) and the capitalized rental income ratio, lands (Nrd) for recreational purposes, lands for industry, transport, communications, energy, defense and other purposes. Keywords: expert monetary evaluation, land plot, land legislation methodical approach, normative monetary evaluation.

International Financial Standards in the Global Legal Order and in EU and EAEU Law

The global financial crisis strengthened the role of international financial standards in global commercial architecture and outlined the specialization of standard-settingbodies. These standards may be transposed in international agreements or be implemented in the legal order of states and state communities (such as the European Union (EU) and the Eurasian Economic Union (EAEU)). The development of standard-setting bodies and the evolving process of soft law rulemaking have led to the establishment of a specific mechanism, which may be called “the soft law mechanism.” The authors argue that this mechanism includes several components: normative (IFS), institutional (SSBs), controlling (peer reviews), and assuring (implementing incentives) components. However, despite the rising influence of international financial standards, a strict boundary between soft and hard law should be established. This article outlines these boundaries and justifies the use of the term soft law. In post-crisis global financial regulation, the role of soft law has increased not only in the financial market but also in the field of monetary regulation. Along with the traditional mechanisms of financial support from the International Monetary Fund (IMF), states may use alternative bilateral and regional mechanisms. At the level of integration associations, soft law manifests in different ways. In the EU, despite the expansion of its field of action, soft law is purely an auxiliary element of the Union’s legal system. In EAEU law, the mechanism of soft-law regulation can beconsidered promising, given the peculiarities of the integration model.

Методичні аспекти визначення розміру втрат сільськогосподарського виробництва при вилученні земельних ділянок для інших цілей

The purpose of the article is to investigate the genesis of the mechanism of compensation for losses of agricultural and forestry production and to propose certain directions for its improvement. Research methods. The following methods were used in the research process: monographic, historical and logical (for retrospective review of compensation for losses of agricultural production), comparison (for comparison of indexed standards by different approaches), graphical (for visual reflection of the obtained results), generalization (for the formulation of conclusions). Research results. In order to further improve state regulation of land protection and rational use, an analysis of the mechanism of one of its key economic levers - compensation for losses of agricultural and forestry production in case of withdrawal of land and their use for purposes other than agriculture and forestry, restricting the rights of owners and land users and deterioration of land quality. Possible approaches to modernization of standards for compensation of losses of agricultural production on the basis of their indexation with the use of price indices of agricultural products and inflation are considered. The comparative characteristic between them and indicators of normative monetary estimation of lands is carried out. Scientific novelty. The study of new methodological approaches to setting standards and determining the amount of losses of agricultural production, which are subject to compensation for the withdrawal of land for other purposes was further developed, based on the use of regulatory monetary valuation of land. Practical significance. The application of modernized standards for compensation of losses of agricultural production in the new economic conditions will increase revenues to local budgets, promote the rational use and prevention of unjustified withdrawal of land. Tabl.: 3. Figs.: 1. Refs.: 14.

Macroprudential Regulation in Ensuring of the Development of Financial Markets

Introduction. The study has confirmed that ensuring of financial markets’ development stability is connected with the development of an effective system for macroprudential regulation. The financial crisis has shown that price stability is not enough to ensure financial stability. The financial and business cycles are not synchronized – therefore risks can arise, especially during periods of “disconnection” between two cycles. Purpose. The aim of the paper is to systematize basic concepts of macroprudential regulation in financial markets, considering international practice of its instruments selection and usage. Results. It is clarified the approaches to a set of macroprudential instruments formation which depends on the country’s economic development and the vulnerability of a financial sector to internal and external shocks. It has been substantiated that monetary regulation is aimed at ensuring price stability in the market for goods and services. It has been proven that it should not be used to address hotbeds of volatility in asset markets. This is a subject for macroprudential regulation, aimed to ensuring the stability of financial markets and containing systemic risk. It has been identified the factors causing the need to implement the strategy of macroprudential regulation in financial markets to ensure their stable development. They include: systemic risk and financial cycles; considering the importance of a growing market’s credit system and measures to address its risks; the need to increase the transparency of the shadow banking sector; problems in regulating the FinTech branch; international financial standards; the growing role of the central periphery in international finance. Conclusions. It has been concluded that a powerful macroprudential political mandate and an adequate set of instruments should be given for central banks to solve the problem of increasing financial risks, especially in situations where monetary regulation is adaptive. It has been substantiated the conclusion about the need to develop supervisory and coordination mechanisms in the financial market and the introduction of end-to-end monitoring of systemic risks as a prerequisite for restoring financial stability.

Cryptocurrency and Privacy: Economic Analysis of Law

The dynamic technology junction of Cryptocurrency and Privacy pose several implications to the existing economic and legal regulations. The present work intends to take up an economic analysis of the laws relating to Cryptocurrency in the context of Privacy. The concept of money and development of fiat currency with role of banking industry leads one to understand the background of Cryptocurrency basis, therefore a segment on the historic perspective of money, development of fiat money and role of banking industry as an intermediary are added in the present work. The technology of Blockchain used in Cryptocurrency transaction transmits the existing monetary regulations across the globe thereby challenging the financial systems. The economics of Cryptocurrency has generated sufficient interest and the present work surveys such interest. The most comprehensive regulation on Privacy and Data protection having a global impact is the European Union’s General Data Protection Regulation (EUGDP), which took effect in May 2018. The EUGDP Regulations by giving much needed importance and protection to the individual’s data privacy and security have altered the functionality of the Data driven companies such as Facebook, Google and others. The work takes a brief note of issues such as data controller and data processor identification, territorial and cross-border data transfer issues, legitimate bases for processing personal data and individual’s privacy rights as some of necessary compliance under the EUGDP Regulations that interact with the blockchain technology used under Cryptocurrency transactions. The conclusion suggests the need for economic analysis of laws relating to Cryptocurrency and Privacy for their intrinsic economic value.

What Signal Paradoxes of Global Economy

The technological and institutional transformation of the global economy is accompanied by paradoxes that arise at its various structural levels. The global COVID-19 pandemic and its consequences have strengthened the paradoxical situations. The main paradox of globalization receives an unexpected and dramatic verification by the spread of the SARS-COV-2 virus. Disruption of international communications as the only possible way to combat the spread of infection in the short term contradicts the need to restore its interconnectedness in the long term. The institutional contradictions within global economic governance does not correspond to the digital path of the global economy development. Macroeconomic paradoxes signal the need for a transition from the dominant monetary regulation to fiscal expansion. Monetary regulation mechanisms, even in their non-traditional forms, are ineffective given the coincidence of the coronavirus pandemic with high volatility in global stock markets and oil and gas markets. Fiscal stimulation undertaken by states in the face of the spread of virus can be interpreted as a pilot project for the implementation of some of the basic ideas of the Modern Monetary Theory (MMT). The solution of the microeconomic paradox of public goods is possible on the basis of the principle of "rationality" as a priority social concept. Paradoxically, the shock of the pandemic, which “blew up” the course of things, provoked an unprecedented decline in business activity in a number of sectors of the economy, under certain conditions, can turn the vector towards economic growth and development. The paradoxes of the global economy signal that the current socio-economic model of the global economy has exhausted its endogenous development potential. Resolving paradoxical situations requires updating scientific views and patterns of their implementation. The European Commission's economic recovery plan addresses the future generation of the European Union. The shock of the coronavirus pandemic accelerates the transfer of values and technologies to the new paradigm of global world.

ТЕОРЕТИЧНІ ОСНОВИ ГРОШОВО- КРЕДИТНОГО РЕГУЛЮВАННЯ ЕКОНОМІЧНОГО ЗРОСТАННЯ

У статті досліджено теоретичні основи грошово-кредитного регулювання економічного зростання. Визначено сутність, мету, завдання та цілі грошово-кредитного регулювання економічного зростання. Розглянуто стратегічні, проміжні та тактичні цілі грошово-кредитної політики, яка формує заходи грошово-кредитного регулювання. Обґрунтовано та проаналізовано значення інструментів грошово-кредитної політики, яка формує цілі для грошово-кредитного регулювання, спрямованого на економічне зростання.

Financial factors for restraining the underground economy: case of Ukraine

The underground economy in Ukraine is one of the major obstacles on the way to accelerative economic growth and European integration processes. The high level of undergrounding leads to the weakening of the regulatory impact of fiscal and monetary policy instruments on the development of the national economy. Against this background, the financial and economic processes undergrounding is a major challenge and a top priority problem for Ukraine today. The article aims to determine the financial levers to restrict economy’s undergrounding and justify measures to reduce the risk of undergrounding by certain monetary and budgetary parameters regulation. The research methodological basis is the methods of scientific abstraction, induction, deduction, generalization, logical method. For analytical calculations there are used coefficient analysis, mathematical methods, including correlation analysis, comparison and grouping methods, synthesis, tabular and graphical methods. The Ukraine underground economy is selected as the study object example with this methods’ system using. Therefore the study, based on the calculation of the Fechner correlation coefficient, has revealed the presence, closeness and direction of the relationship between monetary indicators (values of changes in monetary aggregates M0, M2 and M3, CPI, changes in the official hryvnia rate to the US dollar), budgetary parameters (changes in intergovernmental transfers, changes in external public debt, taking into account inflation) and the underground economy level. Thus, according to the results of the analysis, the main directions of the relevant regulatory bodies influence on the national economy unshadowing have been determined.

FEATURES OF INTEREST-BEARING MONETARY POLICY INSTRUMENTS OF THE CZECH NATIONAL BANK

The features of the economic development of the Czech Republic after the global financial crisis, the role of the Czech National Bank in the formation of macroeconomic policies, as well as the peculiarities of monetary regulation in the study period have been defined in the article. The main goal of the paper is to assess the impact of interest rates used by the Czech National Bank in the process of monetary regulation on the dynamics of the main macroeconomic indicators, which is considered as one of the necessary conditions for the effectiveness of the inflation targeting regime. By the results of the correlation analysis and Fisher’s exact test, it has been determined that the Czech National Bank could affect the main macroeconomic indicators based on the percentage of monetary policy instruments used.

Methodical approaches to the assessment of the reproduction of the agricultural enterprises material and technical base

The signifcance of the evaluation of the logistical base of agricultural enterprises in the accounting system is revealed in the article. Research methods have been described and alternative approaches to inventory valuation by national and international accounting standards have been investigated, and it has been identifed that there are some inconsistencies in the formation of inventory values at the date of receipt, disposal and balance sheet date. The main features of organization of accounting of land plots in agricultural enterprises are established. To determine the value of the land previously used by the enterprise (for example, on certifcates of ownership and use), we propose to use in the current accounting the estimated value of the land, which is based on the regulatory monetary valuation, determined by differential rental income. It has been found that an integral part of a biological transformation is the assessment of changes in a biological asset, which includes measuring and controlling changes in quality (fat content, protein, fber strength, etc.) or quantity (breeding, weight, etc.). In the course of the research it is determined that the process of accounting and valuation of biological assets at fair value should include such steps as: defning biological assets as an object of accounting according to their classifcation; specifcation of biological assets by species, cultures, rocks and other defning features; active market research and price information and technical and economic information collection; selection of biological asset valuation methodology; the calculation of the fair value of biological assets in accordance with the methodology adopted. An examination of the IFRS 13 "Fair Value Measurement for the measurement of biological assets at fair value" has shown that it should be made from the perspective of all market participants and the market environment should be assigned to the entities themselves. This will take into account the differences that exist between them, as they differ not only in terms of quality but also in the types of economic activity. In order to improve the investment attractiveness of enterprises, it is advisable to evaluate agricultural organizations' land resources according to International Accounting Standards, which provide for fair value. Valuation of assets and liabilities at this cost will increase the transparency of the fnancial statements and the reliability of the information on the fnancial and economic activities of the entity. In addition, in the analysis of fnancial and economic activity of enterprises of the corporate sector of the agrarian economy, a real assessment of land resources will have a positive impact on the normative indicators of liquidity and fnancial stability, which is especially important in the conditions of fnancial crisis and growing need for investment. Key words: material base, resources, inventories, fxed assets, reproduction process, market value, fair price, land valuation, accounting efciency.

NORMATIVE MONETARY VALUATION OF LAND AS A BASIC COMPONENT OF FISCAL REGULATION ОF AGRICULTURAL LAND OPERATION

Land resources have been identified as the basis for the development of Ukraine’s economy and positioning itself in the world market. The role of sound fiscal policy for the functioning and development of the agar sector of the country is determined. The concept of monetary valuation of agricultural land, legislative regulation and methodological basis for its conduct are analyzed. The structure of agricultural lands in the context of lands has been investigated. Most of the territory of Ukraine occupies agricultural land, according to the State Service of Ukraine for Geodesy, Cartography & Cadatsre they make up 49% of all land in Ukraine. Most agricultural lands are arable (fallow) — 79% of the total agricultural land, these lands play a significant role in the Ukrainian economy, as they are the food base for agricultural production. The information base of the regulatory monetary valuation of agricultural lands has been determined. The problems of determining the normative value of agricultural land have been identified. The statutory monetary valuation of land is now the basis for the calculation and payment of tax 4 groups, which are the majority of producers in Ukraine and the rent for the use of agricultural land. The results of the regulatory monetary valuation of land are the basis for the formation of the starting price of the right to lease on agricultural land of state and communal ownership. The state of the normative monetary valuation of agricultural lands and agricultural land is analyzed. The problems of the normative monetary valuation with information support were singled out, the creation of a single portal for the normative monetary valuation of agricultural lands is a significant step to ensure the information base of land valuation, as well as to facilitate access to information on the normative value of land.

Léon Walras and Augustin Cournot on the Regulation of Paper Money: Rules vs. Discretion at the End of the 19th Century

This paper compares Léon Walras’ and Augustin Cournot’s views on monetary regulation. It shows that whereas Cournot believed discretionary monetary regulation to be convenient and acceptable, Walras held that the only acceptable monetary system is based exclusively on the stability of the value of money under a monetary rule following a strict equivalence between metallic reserves and a pure medium of exchange form of money. The paper also advances Cournot understood more clearly than Walras the evolution of the monetary system of their days because Walras was trying to guarantee the coherence of his pure theory with his applied theory, which made him unable to accept the evolution toward a monetary system based on fiat money.

The United States and global regulation of convertible virtual currencies

The regulation of convertible virtual currencies (for instance Bitcoin) is an area both of global cooperation and global competition. On the one hand, virtual currencies create serious problems of payment for illegal transactions, money laundering, tax evasion, and consumer fraud. On the other hand such currencies, have the potential to lower the costs of commercial and consumer transactions and to facilitate international trade. Both dealing with the problems and realizing the potential of virtual currencies require international cooperation.There is no uniformity in national legislation on virtual currency. A recent survey of over 100 countries showed a wide variation in both the amount and methods of regulation 2 . While, at this stage, experimentation with various types of regulation may help discover better ways to deal with this currency, on the other hand, there is a real danger that some countries will be come unregulated virtual currency havens where the worst aspects of virtual currency can flourish.This article will look at United States law, and also at existing and needed international cooperation in the areas of taxation, investor protection, consumer protection, monetary regulation, and crime prevention.

Coordination of Fiscal and Monetary Regulation in Armenia

Coordination of Fiscal and Monetary Regulation in Armenia

Neoliberalismo, inserción internacional y financiarización: una comparación entre Argentina y Portugal

El presente trabajo intenta analizar el neoliberalismo periférico financiarizado (NPF) como forma específica del neoliberalismo. Tras presentar cuatro formas diferentes y criterios para delimitarlas, se estudian las características generales del NPF. Se destacan una matriz común de políticas, un modelado similar de estructuras productivas centradas en la acumulación financiera y una articulación común a los procesos de valorización internacionales. Comparando dos países que ejemplifican el NPF (Argentina y Portugal), se corrobora la caracterización general. Pero también se observan especificidades en la regulación monetaria, la inserción internacional y los mecanismos de la regulación poblacional, que le dan al modelo cadencias específicas, importantes para analizar las crisis y las alternativas para estructurar políticas de desarrollo diferentes.