Share Of Cash Research Articles

Correlation of the distribution of cashless banking transactions and certain macroeconomic indicators in Ukraine

This article is devoted to outlining current trends in the cashless banking sector in Ukraine and exploring the correlations between the spread of cashless banking transactions and certain macroeconomic indicators (including gross domestic product per capita) to improve the methodology for studying the cashless activities of banks and forming effective mechanisms for their further development. The study employs special quantitative methods, including statistical and correlation analysis, which characterize the relationships between the spread of cashless banking transactions and certain macroeconomic indicators. The dynamics of changes in the share of cash and cashless transactions in Ukraine over recent years are described. The current state of development of cashless banking transactions, as well as their structure by quantity and amounts, is characterized. The correlations between the volumes of cashless banking transactions and GDP per capita are substantiated using statistical correlation analysis methods. A schematic representation of the algorithm of the identified correlation relationships between the studied indicators and their impact on the stable economic development of the country is provided. The relationships between the volumes of the shadow economy in the country and its cashless sector are described: an increase in the share of cashless payments in the economy contributes to a reduction in the level of the shadow economy and an increase in state revenues, which stimulates further economic development and recovery of the country. The main problems with the spread of cashless banking transactions are outlined: the high level of the shadow economy in Ukraine, the instability of the economic situation and the energy system of our country, especially in wartime conditions, as well as the low level of financial inclusion and financial-digital literacy of the Ukrainian population. It is noted that Ukrainian online banking is less bureaucratic and requires less time for use and transactions than European online banking. On the other hand, it is less secure due to the enhanced authentication and increased security measures of European online banking. Potential ways for the further popularization of cashless banking transactions in Ukraine are identified, including the optimization of their positive impact on the sustainable economic development of the country.

Capital Structure and Corporate Performance: An Empirical Analysis from Central Europe

The capital structure and its indicators play a significant role in corporate finance. The aim is to estimate business performance using selected indicators describing primarily the capital structure, asset structure, or liquidity of transport companies in Central Europe. The total sample consists of almost 4000 small and medium-sized enterprises in the transport sector. This data is collected from Amadeus Bureau van Dijk. The results show that six out of ten variables are statistically significant predictors affecting business performance; two out of the six indicators are categorical variables, such as the company size classified into small and medium enterprises and the country divided into the Czech Republic, Hungary, Poland, or Slovakia. We find that Hungarian medium-sized enterprises show higher profitability than other enterprises, assuming other factors are unchanged. Finally, the results demonstrate that a high debt ratio and a high share of non-current assets in total assets have a negative impact on corporate performance in contrast to the current ratio and the share of cash and cash equivalents in total assets. In other words, liquidity and cash and its equivalents have a significant role in increasing business performance. These findings are specific because, generally, high liquidity does not positively impact performance.

Effect of financial access on cashless economy: The case of Ukraine

The pandemic and wartime in Ukraine confirmed the importance of cashless payments for financial stability. The purpose of the paper is to examine the effect of technological infrastructure and financial access factors on cashless economy development. The impact of the infrastructure factor is assessed in case of Ukraine, using NBU’s data on payment infrastructure during 2001–2022. The hypothesis of the boosting effect of financial access towards a cashless economy has been tested using the method of correlation between M0/M3 and different indicators of financial access (usage of essential technologies, financial services) based on data of World Bank, IMF, and Triple-A in 2021. The study’s results show that globally there is an almost linear relationship between the number of open financial accounts and the increase in the level of cashless (0.954). It is also revealed that the rise of the share of the population making electronic payments decreases the share of cash in the economy. It is determined that the spread of the crypto-assets has a significant impact on the reduction of cash in the economy (an increase in the share of the population operating with cryptocurrencies by 1% reduces the share of cash by 0.5%). Regarding regulatory policies, it is proposed to stimulate the coverage of the population with open financial accounts, making mandatory payments with electronic payment systems and developing their infrastructure.

Research on Financial Asset Allocation Based on Mathematical Programming Model

With the increase of the total amount of family finance and the continuous enrichment of the types of family financial assets, the awareness of family financial management is increasingly strengthened, and people's understanding of family financial assets and their choice behavior begin to change. Financial asset investment has been deeply involved in people's social business activities, especially commercial banks, investment institutions, foundations, etc., which must participate in the investment and management of valuable financial assets at home and abroad. If investors want to reduce the risk of assets without losing profits, they need to diversify their investments and allocate assets effectively. For specific family financial products, some situations often occur in the process of combination, for example, the specific share of insurance assets is gradually increasing, while the share of cash and savings deposits is gradually decreasing. In this paper, the dominant principle of investment strategy is established, and the mathematical programming model of financial asset allocation is established. On this basis, the method of selecting the optimal financial asset portfolio is put forward.

Central Bank Digital Currency: Scenarios of Implementation and Potential Consequences for Monetary System

Abstract Computerization of social life enabled market participants to search for new forms of electronic payments. The share of cash in total payments is systematically decreasing, which poses the risk of being supplanted by other instruments, including cryptocurrencies. Central banks, therefore, faced the challenge of adjusting their issuing activities to the current social and market conditions, which resulted in the emergence of the concept and discussion of the introduction of digital cash. The purpose of this paper is to examine the abovementioned issues and indication of potential scenarios for the introduction of central bank digital currency with an indication of potential consequences for the banking sector. The thesis of this paper is the following statement: The emergence of digital money of the central bank may significantly change the nature of commercial banks’ activities - including potentially eliminating their role in issuing cashless money.

Diagnostics of the current state of financial market of Ukraine

Methods. The theoretical and methodological basis of the research is the work of domestic and foreign scientists. The results were obtained with the application of a system of methods: the method of logical analysis made it possible to develop the logic of the research; deductions - to identify certain factors affecting the development of the financial market; generalization and synthesis - for the formation of a scientific approach to the development of the financial market. Methods of statistical analysis were used to assess the dynamics and structure of financial market components. The graphic method made it possible to visualize the obtained research results. Results. The authors of the article analyzed the current state of the money market of Ukraine as a component of the financial market. The state and trends of the functioning and prerequisites for the development of the money market in 2009–2021 were studied. The analysis of the dynamics of monetary aggregates of Ukraine, the level of monetization of the country’s economy and the level of security of the functioning of the money market was carried out. The tendencies of the development of the money market that are characteristic of the studied period are as follows: lack of control by the banking system of more than a quarter of the money supply; insignificant growth rates of monetary aggregates; growth of the share of cash in circulation; exceeding the level of security of the money market by more than three times the normative value. The diagnosis of the second component of the financial market – the capital market – was carried out, the results of which are as follows: a rapid upward trend in the volume of transactions on the capital market; dominance in the market of share securities, the share of which during the analyzed period amounted to more than 70%; the complication of the structure of securities creates conditions for the diversification of the placement of temporarily free financial resources; dominance of the secondary market with a gradual increase in its share to 99.88%. Novelty. A description of the current state of the country’s money market is given, the general trends of its development during the studied period are highlighted. Development trends of the capital market of Ukraine were determined and problems were identified that slow down the effectiveness of the transformation and integration processes of the domestic financial market. Practical value consists in the possibility of applying the developed and provided proposals regarding the formation of modern trends in the development of the financial market in general, and the money market and the capital market in particular, in order to increase the efficiency of their functioning. The obtained conclusions and research results, as well as the provided recommendations, will contribute to the effective functioning of the financial market of Ukraine.

WHAT MONEY WILL BECOME A MAINSTREAM CASH FLOW – ELECTRONIC OR VIRTUAL?

The article considers the current issues of monetary circulation in Ukraine and the world in the context of global challenges related to the world financial crisis of 2008-2009, the coronavirus pandemic and the Russian-Ukrainian war. The purpose of the study is a comparative analysis of electronic money, both fiat and virtual, as non-fiat, regarding the possibilities of their transformation into mainstream, that is, to occupy their dominant position in the money circulation systems of Ukraine and the world. It is noted that virtual money is often also called cryptocurrencies, because it is based on the blockchain technology, which provides a cryptographic system for protecting information. It is emphasized that their main technological feature is the decentralized nature of the crypto network. This means that they are not emitted or controlled by the state, and therefore cannot belong to fiat money (as opposed to electronic). Both advantages and disadvantages of virtual money compared to electronic ones have been identified. The presence of such shortcomings in cryptocurrencies, as a significant energy consumption of mining coins, high market volatility, the presence of «bad actors» in crypto networks and the displacement of national currencies, acutely raises questions about their regulation. It is proposed to distinguish between the five models of regulation of cryptocurrencies: repressive (with their complete prohibition); conservative (with the possibility of their purchase and sale in crypto exchangers); liberal (with permits for most operations with them); legal turnover; permitting (with recognition as a means of payment on par with the dollar and other reserve currencies). It is noted that despite the significant restrictions, especially according to the demands of repressive and conservative regulatory models, the cryptosector is rapidly developing both in the world and in Ukraine. As a positive moment in the development of the cryptosector in Ukraine, it is noted that it is already «working» in support of Ukraine in the war with the russian federation. It is concluded that the mainstream of cash flow should be electronic money. Virtual money should not bypass their share in cash and become another reserve currency. Otherwise, it will give cartblanche to transnational capital and undermine the basis of the current world system – the division of the world into separate states.

Financial Stress Index as an Indicator of Financial Stability of Ukraine in War Conditions

The importance of proper statistical support of the financial and banking system of the country is substantiated. It was noted that the statistics of the financial sector forms indicators of monetary and credit statistics, statistics of financial markets, statistics of financial accounts and indicators of financial stability. The criteria of financial stability were described: the financial system is liquidated and capitalized; payments and settlements are studied on time; the financial system effectively transforms free funds of citizens and businesses into loans and investments, etc.
 The goal of macroprudential policy is given and the system of indicators that characterizes the level of financial stability of the country is described. It was defined the key groups of indicators, on the basis of which the models of stress testing of banking systems by the National Bank of Ukraine are implemented. Particular attention was focused on the financial stress index, which covers five sub-indices (banking sector, corporate securities, government securities, foreign exchange market, household behavior) and takes into account the effect of their correlation.The dynamics of the IFS for January - May 2022 were analyzed. It was noted that at the beginning of January, the financial stress index was 0.01, and as of February 24, 2022, it has grown rapidly to 0.466 for all components, which indicates the systemic nature of stress for the financial sector in general. It was noted that the level of the sub-index of household behavior was relatively stable, since there was no significant outflow of deposits due to the preservation of public trust in the banking system. The value of the banking sector sub-index (0.075) improved by the end of May thanks to the improvement in the level of liquidity, while the currency sub-index (0.113) maintains quite high values. In May, the IFS fell to 0.265, but the level of stress in the financial market remains quite high by historical standards.The structure of the money supply was analyzed and it was determined that its share of cash was a third of the entire money supply in circulation. The share of cash in February and March 2022 significantly increased compared to the corresponding months of 2021 - by 3.2 percentage points and by 2.9 percentage points, respectively. The share of deposits in the national currency in March 2022 amounted to 34.7%, which is 6.0 percentage points more than compared to March of the previous year. It was determined that the credit demand of the population decreased significantly during the war, in particular, the attractiveness of long-term deposits decreased. Based on the oscillation coefficient, it was determined that in the first half of 2022, the official exchange rate hryvnia to dollar was more stable than the hryvnia to euro exchange rate.The financial losses of Ukraine as a result of the war were characterized. Thus, losses of physical capital from the destruction of enterprises, housing and infrastructure reached 100 billion dollars of the USA, which is equivalent to 50% of GDP in 2021. It is noted that currently the main source of covering the budget deficit is international aid.

The management of forming and assignment profit on the company with aid factor analysis

The purpose of the article is research a management process of forming and assignment profit of the company that allow implement and perfected its activities by ways saving and allocation. The methodological basis of the research are to factor analysis is possible to reveal sources of increasing profitable, that in further these additional cash amount to refer on the enterprises activity that provide efficiency and stability of its financial condition. The scientific novelty of received results is substantiation, that before the company to attend out several tasks in the process of production-economy activity, where efficient decision, which determine it stability of him financial condition that witness perfection of executed operations, financial independence and solvency. Financial-economic condition of the enterprises activity constantly is in center of attention high leadership of the company, as much as monitored all positives and negatives impacts of take him decisions into efficiency and results. And profit of the company measure results of the him activity by totals during realization of commodity production, at the time amount of increasing of this profit achieved out by means of growth income and lowering expenses. In the final of report period profit which received and fully belong the company, that is net profit, to separated according its owner interest, and also indicated in statutes purposes. Conclusion. Therefore namely profit of the company is basis source for compensation debts and liabilities, dividends pay of stockholders and cash share founders, replenishment of owner stockholders capital, use of sourses for improving the continuous economy activity, compensation of present losses, to creation of special funds (by purpose). And proportions of assignment profit of these directions the company to determine him strategical aims, plans and the production program. And after assignment profits, it in mandatory to invest and place a share of cash pledge in specialize funds to continue the further production process, purchase raw matherials, components, timely fulfill payment liabilities with all counterparties, participate in the stock exchange. Key words: profit, profitable, factor analysis, good production, company

Forecasting banknote returns in a changing payments environment

This paper provides a model for forecasting cash returns to central banks. Using data from Ireland, the study identifies a recent structural shift in the relationship between banknote returns and cashbased personal consumption expenditure, likely due to the adoption of contactless payments. Projections of banknote returns are informed by three elements: forecasts of personal consumption, the cash share of that spending, and the returns ratio — that is the ratio of (the log of) banknote returns to the (log of) cash-based personal consumption. To illustrate the modelling approach, the study considers the effects of future payment instrument choices and of COVID-19 on consumption to forecast cash returns for Ireland up to 2030.

УПРАВЛІННЯ ГРОШОВО-КРЕДИТНОЮ БЕЗПЕКОЮ В УМОВАХ ВІЙНИ

The essence of monetary security of the state has been considered in the paper. It has been established that monetary security is considered as a process of ensuring effective monetary policy and as a state of monetary system in scientific literature. It has been determined that the object are certain elements of monetary system of the country, the subjects of monetary security are primarily the central bank, as well as financial institutions, businesses and individuals, the subject of monetary security are measures, aimed at detecting, identifying, monitoring and neutralizing risks and threats arising in monetary sphere. The main indicators used to assess the level of monetary security of the state have been highlighted: the share of cash outside banks in the total money supply; the difference between interest rates on loans granted by deposit-taking corporations in the reporting period and interest rates on deposits attracted by deposit-taking institutions, the level of weighted average interest rate on loans granted by deposit-taking corporations in national currency relative to the consumer price index; the share of consumer loans to households in the overall structure of loans to residents; the share of long-term loans in the total amount of loans granted; the total amount of exports of financial resources outside the country. An analysis of level, dynamics and volatility of monetary security indicators for the period of 2017–2021 and the first quarter of 2022 has been carried out. The main risks and threats to monetary security of the state that arise in conditions of military aggression have been analyzed. The influence of military aggression on the level of indicators of monetary security has been determined. The main measures taken by the National Bank of Ukraine to stabilize the monetary sphere and their effectiveness have been described. It has been noted that in martial law market instruments of monetary policy are not effective, so it is appropriate to use instruments of direct influence. The main innovations of monetary policy in martial law conditions have been considered.

Falling use of cash and population age structure

We compare three ways to measure the use of cash in a country and argue that one way is perhaps more appropriate than the other two. As shown in three graphs covering 25 countries, using our preferred measure the share of cash fell between 2012 and 2019; this fall was gradual in most countries. Existing payment diary studies indicate that younger adults marginally favor cash substitutes (mainly cards) over cash compared with older adults. This difference in the revealed preference for cash across countries is related to our measure of cash use in a fixed-effects model over the period 2012–19. A negative and significant relationship is found and thus appears to be an important influence on the demand for cash. The decline in the share of cash use across countries is slow since the change in the age structure of populations in these countries is also slow and approximated by the sum of birth rates (new younger adults entering the adult population) and death rates (older adults leaving the population).

Complexity between Aging and the Structure of Financial Market: Empirical Evidence from Microdata

By empirically testing the scale and structure hypotheses of aging’s impacts on the financial market using Tobit, FRM, and Heckman selection models, this paper proves that the number and proportion of elderly family members change the structure of families’ financial assets, though without significant effects on their overall size. Specifically, aging increases the share of cash and deposits in families’ total financial assets and decreases both the quantity and percentage of investment in risky assets. One more family member aged sixty and over, the risky assets decline by 5, 500RMB and its share decreases by 8.8 percent. A Heckman two‐step model verifies the robustness of our results. The heterogeneity analysis reveals that aging plays different roles in different types of financial assets.

ЎЗБЕКИСТОНДА МАЖБУРИЙ ЗАХИРА ИНСТРУМЕНТИНИНГ ИШЛАШ ҲОЛАТИ

This article analyzes the reserve requirement tool of the monetary policy. In particular, the impact of the Central Bank’s reserve requirement policy on commercial banks, as well as the impact of changes in the money supply on the effectiveness of the reserve requirement instrument was studied. According to the analysis, the quantitative easing by reserve requirement tool from 2018, and this was mainly done in relation to deposits in the national currency, had a positive impact on commercial banks. Also, the high share of cash in the structure of the money supply in the national currency leads to the fact that the reserve requirement instrument does not work effectively enough. This is because the reserve requirements apply to deposits in commercial banks, and much of this cash is circulating outside the banking system, and the reserve requirement does not extend to such a resource.

Drivers of the Cash Paradox

An upward trend in the share of cash in GDP has been observed since the beginning of the 21st century and has not yet been fully explained in the literature. In fact, the interest rate is the only variable that has been well researched and well confirmed as a determinant of the cash/GDP ratio. The novelty of this study is primarily considering new determinants of the share of cash in GDP (including in particular monetization and financial development), as well as testing the significance of uncertainty and institutions. The data cover the period 2001–2020 for 82 countries. The most important conclusions include: the share of cash in GDP is primarily dependent on its lagged values (payment habits) and the ultra-loose monetary policy of central banks. However, some other variables also contribute to this process—such as monetization and crises in the real economy.

INDEX METHOD IN MODERN STUDIES OF MONEY CIRCULATION OF UKRAINE

The article discusses the theoretical and practical issues of using the index method when conducting statistical monitoring of money circulation. The essence and basic concepts of monetary circulation in Ukraine are disclosed. It was found that cash flows and the amount of money in the economic system act as an important regulator of material production and all economic processes, which made it possible to build and characterize two- and three-factor deterministic GDP models for 2019‒2020. For this purpose, such indicators of monetary circulation as the average annual size of the money supply, cash, and the share of cash in the money supply, the speed of money supply and the speed of cash are calculated. For each model, an algorithm for assessing the impact of these indicators on the absolute change in Ukraine’s GDP by index methods of chain substitutions and the isolated influence of factors is presented and implemented. The advantages and disadvantages of index methods are shown both from the point of view of statistical calculations and from the point of view of economic concepts of money circulation. Calculations show that the growth of the money supply has a positive effect on the dynamics of the country’s GDP in 2020, and the rate indicators, on the contrary, reduce the GDP growth. In modern studies of monetary circulation, it is advisable to use the index method to identify the isolated influence of factors on the absolute growth of Ukraine’s GDP. The same method allows us to reveal how the effect of interaction between the rate of turnover of the money supply and its volume is distributed, depending on their separate influence. With this approach, each factor is provided with the same calculation conditions, the results do not depend on the economic nature of indicators and the order of their location in the original GDP model, there are no contradictions to the economic postulates of monetary circulation, although the problems of choosing a research method and its justification are still open.

Analysis of Retailer and Corporate Payment Habits in Hungary

The study looks at the payment habits of retailers and companies in Hungary, especially the acceptance and share of electronic payments in 2019. In doing so, data from two questionnaire-based surveys and the online cash register database are analysed using statistical methods, decision trees and regressions. The results show that retailer payments are typically cash intensive, while credit transfer transactions dominate at companies. The factors with the largest impact on card acquiring and the share of cash at points of sale is sales revenue and the value of the purchase in the case of retailers, and the proportion of cash wage payments in the case of companies. Costs also play an important role in card acquiring, therefore instant payment, which provides cheaper electronic payment solutions, could be crucial when it comes to smaller retailers and companies offering electronic payments. Public policy measures could mainly target retailers and the micro and small enterprise segment.

النظام القانونی لشرکة الشخص الواحد فی ضوءِ تعدیل قانون الشرکات رقم (٤) لسنة ٢٠١٨ والإشکالیات التی تثیرها

النظام القانونی لشرکة الشخص الواحد فی ضوءِ تعدیل قانون الشرکات رقم (٤) لسنة ٢٠١٨ والإشکالیات التی تثیرها

Precautionary Demand for Cash and Perceived Risk of Electronic Payments

We have recently seen two conflicting trends in the use of cash. The share of e-payments in retail transactions is steadily increasing, but the same upward trend is true for the share of cash in circulation or at least the cash share remained unchanged. This paper shows the significance of perceived risk for consumers’ precautionary demand for cash after they make a decision to use e-payments. We use data from a study involving Polish consumers. The main conclusions are as follows: surveyed consumers perceive a level of risk associated with card and mobile payments and continue to carry cash for precautionary reasons. Factors such as the consumer’s mental state, lack of trust in e-payments, and attitude to risk influence the decision to maintain cash reserves, while the consumer’s income and age may be considered the main determinants of the value of the cash reserve. Consequently, the decision to use e-payments does not necessarily mean that the demand for cash drops to zero. A degree of difficult-to-reduce, autonomous demand for cash may exist independent of the traditionally studied determinants, in particular, those related to the transaction demand.

Does too much liquidity generate instability?

Corporate demand for cash is related to a number of firm-specific characteristics, like the presence of transaction costs, information asymmetry in credit markets, uncertainty and risk aversion. The purpose of this paper is to build a dynamic model that describes the potential chaotic effects of the accumulation of cash by firms over a prolonged period of time. By exploring the theoretical connections between firm financial policies and investment decisions, we show that too much liquidity might generate economic instability. When firm increases the share of cash devoted to risky investment, and reduces the share of cash distributed to shareholders as dividends, the fixed point of the system changes from being stable to being unstable. Moreover, the impact of such a policy on the stability of the system is larger the greater the investment risk. The chaotic behavior is mainly observable in the dynamics of cash, which in turn may affect all investment decisions.