World Financial Market Research Articles

World financial centers: features of functioning

The article is devoted to the study of the essence, types, and stages of development of world financial centers. The work states that the globalization of the financial sphere, which is expressed in the growth of the transfer of assets, internationalization of systems, liberalization and convergence of markets, leads to the formation of a single world financial market, where international financial centers play a key role. Since the end of the 20th century, world financial centers have become an integral part of the global financial market, where surplus capital from countries where its over-accumulation led to a decrease in profits was exported. World financial centers are not just a cluster of financial institutions, but also a dynamic system where all participants constantly and actively interact with each other. The work analyzed the approaches of scientists to the definition of the concept of «world financial center» and summarized these approaches into one definition. The world financial center is where financial institutions are concentrated, contributing to the attraction and redistribution of financial resources. It was revealed that in order to form a world banking center, a country must have a stable currency and economic situation, a developed credit system, well-organized stock exchange activity, moderate taxation, a convenient geographical location, relative stability of the political regime, the presence of standardization and a high degree of information technology without paper transactions. Three key areas that determine the success of global financial centers in competition are singled out: image and communication capabilities, a wide range of financial services and professionalism. Three stages of the development of global financial centers are distinguished – the development of the local market, the transformation of the local market into a regional financial center and the formation of an international financial center. The five largest world financial centers are characterized and their features are highlighted. The methodological basis of the research is general scientific methods of scientific knowledge: analysis and synthesis, generalization, and comparison. The informational basis of the article is the publications of domestic and foreign economists.

Development of islamic finance in the digital economy through financial technologies

In the article, you can see the role and importance of developing Islamic finance in the digital economy through financial technologies. The characteristics of new financial instruments in the Islamic financial system, their connection with modern financial technologies, their place in the world financial market, and efficiency indicators were analyzed. The level and share of the use of financial technologies of the Islamic bank in the digital economy are studied and analyzed by the countries of the world. The results of Islamic finance in the digital economy and the results in several directions were achieved, and which areas of the financial system of our country can be used more effectively were analyzed.

IDENTIFICATION OF KEY DETERMINANTS OF SUCCESS FOR INTERNATIONAL FINANCIAL SERVICES CENTRES (IFSCS) WITH SPECIAL REFERENCE TO INDIA THROUGH GLOBAL FINANCIAL CENTRE INDEX (GFCIS) ANALYSIS AND FACTOR ANALYSIS

The History of International Financial Services Centers (IFSCs) is very long, dating back more than 150 years. Many countries established International Financial Centres (IFCs) to offer International Financial Services (IFS) at various stages of their economic growth. Over time, some of the important hubs for international financial services included London, Tokyo, New York, Hong Kong, Frankfurt and Singapore. These Centers created a large number of jobs and helped the economies of the countries in which they operate to grow. Around 119 centres have been established worldwide to meet the need for international financial services in over 196 countries (GFCI, 2015-2022). India's economy was opened in 1991, but capital account convertibility hasn't been achieved, therefore its influence on the world financial market is viewed as minimal. One of the world's largest economies and a significant consumer of IFS, India very recently announced the creation of IFSC in April 2015. Given how closely the global market is connected via technology, it is essential for India to set up IFSC and appear on the map of the world's financial centre. It is predicted that India is losing US $50 billion year (2015) without an IFSC, and that loss will increase to US $ 120 billion by 2025.
 This paper identifies key determinants of success for IFSC in India by using the two analytical tools namely Global Financial Centre Index (GFCI) analysis in global context and the Factor Analysis in Indian context and finds that IFSC in India, though being a new financial service centre, can certainly increase its competitiveness and become a sustainable successful financial centre more quickly by focusing on the factors identified in this study and the economic impact of IFSC growth in India would be profound.

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.

世界金融市场危机的发展与现状

世界金融市场危机的发展与现状

The Quantitative Assessment of the Model Risk of Option Pricing Models When Volatility is Stochastic

Using Monte Carlo simulation experiments, we examine the model risk of writing call option contracts when the underlying process driving security prices is characterized by stochastic volatility and trading occurs discretely. Simulations in this study reveal that discrete rebalacing risk is the main risk factor of total model risk while model misspecification risk and parameter estimation risk are relatively unimportant when single instrument hedge is utilized. These simulation results suggest that hedging based on the misspecified Black-Scholes model yields the hedging performance as good as that of the fully sprecified stochastic volatility model even when the true process driving security price movement is characterized by stochastic volatility. Hedging based on the Black-Scholes model is the simplest to implement. This may explain why the Black-Scholes formula is one of the best choices of option professionals even though it is widely accepted that the constant volatility assumption of the Black-Scholes model is violated in real world financial market. The results of this paper also suggest that for risk managers of financial institutions, the Black-Scholes option formular can be used as a viable risk management tool even under the financial markets characterized by stochastic volatilities.

The use of financial instruments: European experience and lessons for Ukraine

This topic is relevant for the current study of the financial situation in general, and the derivatives market in particular. In this context, it is also important to outline the degree of state support for the development of the derivatives market, having previously identified the priority areas of state activity in this area. The current development of global financial markets indicates their growing efficiency and increasing role of international capital markets in attracting credit resources. The purpose of the article is to study, evaluate and analyze financial instruments, their impact on the national economy, as well as problems in the introduction of new financial instruments. The article summarizes and analyzes foreign experience in the use of financial instruments on the example of EU countries. The most effective methods of state regulation of financial instruments that can be applied in Ukraine are demonstrated. The dynamics of changes in financial instruments used in the Ukrainian financial market is investigated. The importance of using financial instruments in the Ukrainian economy is substantiated. The article identifies the most important problems and suggests methods and ways of more efficient functioning of the studied market. It is proved that to increase the country’s competitiveness in the world financial market it is necessary to develop new financial instruments. The data on the use of financial instruments along with their grouping for 2013-2021 are systematized. It is necessary to further strengthen the tendencies of providing various types of financial support for regional development. In the future, it should also be taken into account that an indispensable condition for sustainable and effective regional development is institutional support, first of all, it is about regional development funds, which provides for an increase in the budgetary self-sufficiency of the regions. Thus, the coordinated activity of the financial system in a harmonious and professional combination of its functions is possible with the assistance of the state apparatus and a developed financial market

World financial architectonics: current state and the directions of its reformation

The war broken out by Russia against Ukraine caused a violation of the financial balance in the world and resulted in the need to reform the existing structure of the world financial architectonics. The purpose of the paper is to study the problems, identify threats and risks of the functioning of the world financial architectonics; develop and substantiate the directions for its reformation in current conditions. To achieve the purpose, it has been investigated the essence of the term "financial architectonics" and determined its difference from the term "financial architecture". The author's definition of the essence of world financial architecture has been provided, which refers to the development potential of the world economy, world financial and currency systems, and world financial market, which is based on the close interaction of all participants of the world financial space in the direction of forecasting, planning and timely response to all challenges and threats of external and internal environment in order to reduce the negative impact of global financial risks on the world financial security. The problems, threats and risks of the functioning of the world financial architectonics have been identified. Among the main ones are the growth of inflation; deterioration of logistics; destabilization of the situation on the energy market; food and social crises in many countries of the world. The directions for reforming the world financial architectonics in current conditions have been developed and substantiated. The main directions of reforming the world financial architectonics include the need for digitalization, informatization and networking of the world financial space; the development of a cyber security strategy, the global economy and national economies of the world, as well as increasing the efficiency and effectiveness of the international financial policy.

REINSURANCE MANAGEMENT IN THE GLOBAL FINANCIAL MARKET CYCLICITY CONDITIONS

The globalization of economic relations and the integration of Ukraine into the world financial market have significant impact on decision-making in an insurance company in Ukraine. These aspects actualize the study of the insurance companies’ activities in the conditions of world financial market cyclical development, and it determines the purpose of the article. The purpose of the study is to develop theoretical and methodological provisions and practical recommendations for managing reinsurance in conditions of cyclical development of the global financial market. Solving the tasks set in the research was carried out using scientific methods of analysis, synthesis, induction, deduction, and analogy – to study trends in the development of the Ukrainian insurance market; logical generalization – to determine the peculiarities of reinsurance management in conditions of cyclicity of global financial markets; comparative and statistical analysis – for analyzing the share of premiums belonging to non-resident reinsurers; Fourier analysis – for analyzing the cyclicity of the development of the global financial market and the reinsurance market in Ukraine. Global business activity develops cyclically. The first cycle is long-term and consists of 14 quarters. Within the long-term cycle, harmonics of a shorter cycle, namely 1 year, were detected. The reinsurance market in Ukraine also develops cyclically. The length of the cycle is 4 quarters. It was established that the peaks of the harmonic oscillations of the development cycle of domestic reinsurance and the world cycle of business activity are antiphase, that is, the phase of the oscillations differs by half a period. The length of the domestic reinsurance development cycle and the global business activity cycle are equal, and the distance between the extremes of the cycle functions is 2 quarters. The practical value of the obtained results is that the established relationships between the cycles and phases of the global business activity development and the reinsurance market of Ukraine provide a toolkit for making management decisions regarding the modeling of a reinsurance portfolio effective structure in the insurance company

Herding in the Chinese and US stock markets: Evidence from a micro-founded approach

Joining WTO accelerates the process of integrating China into the world financial market and should improve the development of the Chinese financial markets. Herding is one of the key aspects gauging the level of market development. Existing literature often uses aggregate level measures to investigate herding and therefore lacks the capability to differentiate autonomous market consensus from herding. This paper applies the Simulated Method of Moment estimator proposed by Chen and Lux (2018) to investigate the herding behavior in the Chinese and US stock markets. It is found that the asset pricing process is driven by fundamental factor and sentiment change due to autonomous switching and herding of the individual investors. We find evidence of herding behavior of individual investors in both stock markets. The Chinese stock market is mainly driven by behavioral sentiment dynamics due to the switching behaviors of investors while the US market is by fundamental factors. The severity of herding in the Chinese market is reduced after China joined the WTO.

Advantages and disadvantages of cryptocurrency development in the world financial market

Scientific article is devoted to the study of advantages and disadvantages of cryptocurrency development in the world financial market. The urgency of the study is due to the high market capitalization of the cryptocurrency, which makes it a component of the financial arena of international scale. The article analyzes the dynamics of the cryptocurrency market development, its problems and benefits for states. The result of the study is the conclusion that cryptocurrencies have a greater number of different problems that hinder their development, their solution can be the regulatory framework for their regulation

Глобальні тренди трансформації світової фінансової архітектури

The article is devoted to the determination of global trends of the world financial architecture transformation. The views of scientists on the term "world financial architecture" were considered, the institutional and economic aspect of this term was studied in the context of financial globalization. It was determined that the global economy is at the stage of significant financial and currency crises. This is accompanied by the weakness of the financial sector in emerging markets, the increase in the number of offshore financial centres, the limitation of the international institutions’ ability to provide financial support to developing countries, etc. Reasonably, the global financial architecture and the need for its transformational shifts directly depends on the trends in the world financial market and the stability of the world economy, which has been experiencing crisis phenomena in recent years. The global economy is experiencing persistently high inflation, the highest in last decade, amid heightened economic and geopolitical uncertainty and disruptions in energy and commodity markets caused by the COVID-19 pandemic and Russia's ongoing war in Ukraine. An analysis of world commodity price trends is provided. It determines the high inflation of consumer prices, that is especially high in developing countries. It was determined that the national regulators of developed countries apply a stricter monetary policy and curtail measures to support the economy. It was concluded that the situation on the world commodity markets, high inflation, the increase in the cost of borrowing and the weaker growth of the leading economies significantly undermine the growth prospects of developing countries with emerging markets. This group of countries is in a more unfavourable condition than others and undermines the global stability of the world financial architecture. It is necessary to carry out stabilization measures if inflation indicators will grow not only in developing countries, but also in developed countries, whose destabilizing effect on the global economic system will be more impressive.

MANAGEMENT OF FINANCIAL AND ECONOMIC SECURITY OF BUSINESS ENTITIES IN DURING CRISIS CONDITIONS AND ITS STATE REGULATION

Recently, the development of the economy and the lack of financial resources have set the task for businesses to determine the optimal financing strategy that provides maximum profit growth with minimal risks. In this regard, the problem of financial and economic security of business entities and the definition of its management mechanism is important. The stages of the management concept on financial and economic security of business entities consist of timely detection of internal and external threats and establishment of an effective management mechanism against them. At the same time, it is noted that the dominant countries of the world financial market, which have formed a monopoly model in the distribution of wealth, still see countries such as the Republic of Azerbaijan as their resource provider. This is a source of risk for the national economy in the short and long terms. Therefore, the mechanisms to ensure economic security should be carried out in parallel with the forecasting of socio-economic development of the state.

Optimization of Portfolio Investment Strategy Based on Markov Decision Process Model

With the continuous development of the world financial market, investors are often faced with a wide variety of assets but do not know how to choose. In order to obtain the maximum benefits, how to choose the optimal investment strategy has become a top priority. In this paper, based on Markov decision process model, we study the optimal strategy for investment with two important assets in the market, gold and Bitcoin. we solve the problem with a Markov decision process model and measure the risk of the trade by financial indicators such as deviation rates and bullish indicators. Then a difference-in-difference formula for the asset appreciation rate is introduced to optimize the model by incorporating the long-term impact of trading on assets. Also based on the iterative algorithm of the sample path, an iterative algorithm of the strategy that can be applied online is designed, and it was finally calculated that after five years of investment using this strategy under the initial condition of $1000, $348287.46 could be obtained.

ЕКОНОМІКО-МАТЕМАТИЧНА МОДЕЛЬ Ф’ЮЧЕРСНИХ КОНТРАКТІВ

In the article, the tendencies of the development of stock markets are considered. The study of stock markets today is gaining theoretical and practical importance. Financial markets are the basis of market relations and an important indicator of the state of the economy. The financial market not only directs the flow of funds from owners of savings to borrowers, but also determines the equilibrium price for goods In Ukraine recently, in connection with its inclusion in the world financial market system, there is an urgent need to study price dynamics in different segments of the stock market. At this stage, mathematical methods are being developed for irregular behavior in financial markets study. In this work, methods of nonlinear algebraic equations are used for forecasting the price of futures contracts. In these methods, nonlinear algebraic equations, also called equations with polynomials, are defined as equations with polynomials. Considered the method of price forecasting of futures contracts based on a nonlinear trend model quadratic parabola. Traditional methods of modelling the dynamics of stock market indicators, such as: stochastic and approach based on the theory of deterministic chaos, require additional research. Methods of stochastic analysis occupy an important place in modelling the pricing of various financial instruments. Despite the simplicity of the model, it has a significant drawback – the price of the asset can acquire negative values, which do not correspond to the economic content. The problem of correct description of stochastic variables corresponding to certain financial indicators is inherent in several other models. One of the ways to solve this problem is devoted to this article. The article develops a mathematical model of the dynamics of futures contracts in the financial market, which is based on a system of nonlinear differential equations. The algorithm of the developed scheme of adaptation model adaptation scheme. The mathematical model based on the theory of deterministic chaos. Calculations are carried out on the example of US coffee futures. The results of the calculations are provided.

Analysis of innovative technologies and identification of new information tools for effective activities of enterprises on the example of the financial market of Ukraine

The object of research is modern innovative information technologies as a factor in market transformation. The subject of research is the theoretical and methodological foundations of the use of financial technologies in the financial sector of the economy. One of the important problems for the world financial market today is to increase the efficiency of its functioning through the introduction of modern management methods based on innovative information technologies. The most problematic areas is the use of proprietary software. The importance of the latter factor is increasing every year due to the strengthening of legislative requirements and pressure from rightholders. That is why it is advisable to offer the Blueshift platform, which will help expand the capabilities and functions of financial and economic activities. The study used methods of collecting, processing and interpreting information about innovative financial products, and theoretical generalization, analysis of definitions, comparative analysis, concretization and systematization of modern financial technologies, observation and visual presentation of the analysis results. The main hypothesis of the study is the assumption that the use of modern innovative information platforms will allow active users to increase the efficiency of making ready-made decisions when solving problems arising in the financial sector of the economy. It is impossible to confirm this hypothesis without a detailed analysis of financial technologies, as well as innovations associated with modern open source systems, which allow market participants to reduce costs and maximize the likelihood of data protection. In paper, it was proposed to use the Blueshift platform for research and implementation of systematic investment strategies based on its built-in capabilities. The advantages and disadvantages of using the Blueshift platform as a «platform as a service» are analyzed. Thanks to this innovation, such advantages in functionality as information security, ease of adaptation, and economic benefits can be obtained.

Sovereign default and liquidity: The case for a world safe asset

This paper presents a positive and normative study of a world financial market when sovereign countries can default on their debt. We construct a tractable model that enables us to study sovereign default in general equilibrium. The amount of safe assets is thus endogenous and determined by international risk-sharing. We characterize the equilibrium structure and we show that the market equilibrium can generate multiple equilibria. In addition, the market equilibrium is not constrained-efficient because countries do not fully internalize the value of their debt being used as liquidity. We prove that a world fund issuing a safe asset increases aggregate welfare. The fund's relationship with the IMF's Special Drawing Rights is discussed.

ФІНАНСОВІ ІННОВАЦІЙ: ТЕОРЕТИЧНИЙ ДИСКУРС

The article is devoted to the essence of financial innovations and their economic nature, which primarily reflects innovative developments in the financial segment of the global market, which are implemented in cash and cover mainly significant qualitative changes in organizational, economic and institutional support of financial and credit, financial instruments and financial business practice, as well as the activities of financial institutions. The generalization of methodological and conceptual principles of various theories of financial markets suggests that each of them has its advantages and "bottlenecks" and has performed a historical function in shaping scientific views on financial innovation, their economic nature and mechanisms for implementation in the global process. reproduction of the social product. At the same time, each direction of the theoretical discourse of financial innovations has always been a kind of reaction to the transformations of the capitalist market system and the world financial market, which they have undergone at every stage of world economic progress. At the same time, the theoretical discourse of financial innovations is still in the so-called pre-paradigmatic stage of the study of systemic processes of innovation in the global financial sector. This stage is characterized by the presence of separate concepts of financial innovations and the practice of their implementation in the absence of a single, recognized by all members of the scientific community of their comprehensive theoretical justification. This raises the question of finding world economic science qualitatively new conceptual contours of the study of financial innovations and alternative models of world economic development, taking into account the latest paradigm of financial globalism. In our opinion, the choice of the most effective model should organically integrate on its conceptual platform all constructive elements of previous theories of financial innovation research with their corresponding adaptation to perspective structural changes of the world financial market due to irreversible impact of financial globalization on the international economic system.

Adaptive Magnetic Hamiltonian Monte Carlo

Magnetic Hamiltonian Monte Carlo (MHMC) is a Markov Chain Monte Carlo method that expands on Hamiltonian Monte Carlo (HMC) by adding a magnetic field to Hamiltonian dynamics. This magnetic field offers a great deal of flexibility over HMC and encourages more efficient exploration of the target posterior. This results in faster convergence and lower autocorrelations in the generated samples compared to HMC. However, as with HMC, MHMC is sensitive to the user specified trajectory length and step size. Automatically setting the parameters of MHMC is yet to be considered in the literature. In this work, we present the Adaptive MHMC (A-MHMC) algorithm which extends MHMC in that it automatically sets the parameters of MHMC and thus eliminates the need for the user to manually set a trajectory length and step size. The trajectory length adaptation is based on an extension of the No-U-Turn Sampler (NUTS) methodology to incorporate the magnetic field present in MHMC, while the step size is set via dual averaging during the burn-in period. Empirical results based on experiments performed on jump diffusion processes calibrated to real world financial market data, a simulation study using multivariate Gaussian distributions and real world benchmark datasets modelled using Bayesian Logistic Regression show that A-MHMC outperforms MHMC and NUTS on an effective sample size basis. In addition, A-MHMC provides significant relative speed up (up to 40 times) over MHMC and produces similar time normalised effective samples sizes relative to NUTS.

СУЧАСНИЙ СТАН ТОРГІВЛІ ЦІННИМИ ПАПЕРАМИ НА СВІТОВОМУ ФОНДОВОМУ РИНКУ

The article examines the role of the global stock market in the development of both the individual state and the world economy as a whole. Since today the stock market is one of the most important buffers for the formation and use of investment resources by all economic entities, the main prerequisite for its sustainable development and efficient operation is a favorable economic situation in the country, widespread network of stock exchanges, high confidence and the population to stock market instruments. The place of the stock market as one of the most important components of the world financial market is described. The global stock market can be represented as a mechanism that allows the exchange of financial assets between countries and that shapes their prices. The development of information transfer technologies, new means of payment and assets make significant adjustments to the mechanism of functioning of modern financial markets. In recent years, the global financial market has undergone significant structural changes that have radically changed the conditions and features of their operation, so a comprehensive analysis of the dynamics of the global stock market over the past five years. The globalization of the world economy has led to significant changes in the stock market, such as a significant increase in the size of the international investment market and an increase in the share of portfolio and speculative investors. Acceleration of globalization processes, which are becoming a characteristic feature of modernity, requires a study of the peculiarities of the entry of national markets into the international investment space, so highlighted the structure of investment flows in the global stock market. Uncertainty of the environment, which is a fundamental characteristic of the modern socio-economic system, creates financial shocks and directly proportionally affects the state of securities trading in the global stock market, so the assessment of the leading countries in the world stock market. stock market capitalization. The change in the capitalization of the world's largest stock exchanges over the past five years has been analyzed.