Dissonance between formal and informal housing capital: The case of Korea

2018 ◽  
Vol 50 (6) ◽  
pp. 1171-1188 ◽  
Author(s):  
Jihwan Kim
Keyword(s):  
Interest Rates ◽  
Financial Market ◽  
Market Reform ◽  
Wealth Accumulation ◽  
Risk And Uncertainty ◽  
Informal Housing ◽  
Development Path ◽  
Wealth Concentration ◽  
History Of ◽  
Social Insecurity

This study develops a new way to analyze the evolving dynamics of wealth concentration in the Global South, where indigenous norms and institutions play a crucial role in accumulating wealth. The study particularly focuses on the unique development of the Korean housing finance system: its development path can be characterized as the history of challenges, which refer to forces that have hindered the accumulation of wealth, and responses, which refer to counteractions that seek alternative modes of wealth accumulation. On the basis of such structural dissonance, this study situates how the reconstitution of housing capital discriminatorily reconstructs households’ resilience against economic and social insecurity to maintain and/or pursue homeownership. These findings explicitly contradict contemporary theories of financial intermediation that financial market reform that accompanies new products and services, lower interest rates, and greater liquidity substantially motivates households to purchase real estate. Rather, financial globalization increases inequalities in wealth that are set in motion through the tension between formal and informal housing capital by creating junctions that transfer risk and uncertainty in the financial market onto individuals.

The Financial Market and Government Debt Policy in France, 1746–1793

1992 ◽  
Vol 52 (1) ◽  
pp. 1-39 ◽  
Author(s):  
François R. Velde ◽  
David R. Weir
Keyword(s):  
Interest Rates ◽  
Financial Market ◽  
Default Risk ◽  
Government Debt ◽  
History Of ◽  
Life Annuities ◽  
The Cost ◽  
Debt Policy ◽  
The Revolution

This article offers a new quantitative history of the market for government debt in France before the Revolution. The monarchy was a persistent default risk because of institutional obstacles to raising taxes. Default followed observable rules in targeting specific assets. The financial market reflected both facts: interest rates were high on the safest assets and ranged higher on the most likely default targets. The cost of all forms of new borrowing became substantially higher than the yields on old debt, resulting in increasing government reliance on expensive life annuities.

DOLARIZATION OF THE FINANCIAL MARKET OF UKRAINE: CAUSES, EVOLUTION, CONSEQUENCES

2021 ◽  
Vol 1 (21(49)) ◽  
pp. 56-66
Author(s):  
Ihor Krupka
Keyword(s):  
Interest Rates ◽  
Financial Market ◽  
Foreign Currency ◽  
Banking System ◽  
Market Potential ◽  
National Currency ◽  
Foreign Banks ◽  
Stable Operation ◽  
Negative Consequences ◽  
International Financial Market

The purpose of the article is to assess the level of domestic financial market dollarization, find out the causes of this economic phenomenon, trace its evolution and identify current features, substantiate proposals to minimize the negative consequences for the financial market and the economy in general. The methods of theoretical analysis, synthesis and generalization, analysis of statistical data and its graphical interpretation are used in the research. The results of the research showed that the main reasons for dollarization in Ukraine were high inflation and sharp fluctuations in the exchange rate of the national currency. In general, the dollarization of national financial markets occurs through the following channels: 1) borrowing on the international financial market; 2) the entrance of foreign banks to a domestic market; 3) investing abroad, when a national financial market is not sufficiently developed to create high-quality and highly liquid assets, dollarization provides rapid access to foreign financial assets and optimization of the profitability and risk structure of an investment portfolio; 4) the difference (spread) between interest rates in national and foreign currency. Based on the study of the domestic financial market, the following conclusions are made: 1) the level of Ukraine`s financial market dollarization in the aggregate and in terms of its separate segments is high; 2) this level poses a threat to the stable operation of financial intermediaries and the banking system in case of the national currency devaluation; 3) currency imbalance of assets and liabilities in the banking system has strongly decreased since 2008, but is still significant; 4) foreign currency is widely used by economic agents in the shadow sector of the economy. We consider the current dollarization level dangerous for the development of the country's financial system, and its reduction to a scientifically sound natural level should become one of the main tasks of the National Bank of Ukraine. Achieving the natural dollarization level and effective use of the domestic financial market potential will allow to intensify Ukraine's national economy development and promote integration into the international financial market and the global financial space.

Problems of Russia’s Integration into the Global Financial System

2015 ◽  
pp. 82-90
Author(s):  
A. Kuznetsov
Keyword(s):  
New York ◽  
Interest Rates ◽  
Financial Market ◽  
Low Income ◽  
Financial System ◽  
Developed Countries ◽  
The United States ◽  
International Investment ◽  
Short Period ◽  
Global Financial System

The author examines problems of Russia’s integration into the global financial system since early 1990s. During this short period of time Russia has turned from a net debtor into a net creditor. This is evidenced by its current net international investment position, as well as by active participation in the formation of credit resources of the key international financial institutions, particularly IMF. Still, the net investment income of Russia is negative. Such a disadvantage is explained by the difference in interest rates between payments of Russia on its external obligations and receipts as income from investments in foreign assets, mainly low-income bonds of developed countries, which form Russian international reserves. For three centuries the United Kingdom and the United States have been playing key role in the development of the global financial system. Today London and New York still operate nearly two thirds of the volume of global flows of capital in the international financial markets. Thus, as one of major economies in terms of GDP and as a resource-richest country of the world, Russia, as author argues, can rightfully claim for a more adequate share of income from the global financial intermediation. Obstacles include the lack of development of the domestic financial market and insufficient international demand for financial instruments denominated in Rubles. Russian Ruble remains a purely internal currency which practically is not used in the international trading and financial operations. At this stage, Russia’s inability to influence the basic conditions of refinancing on international capital markets, as well as the recent Western sanctions make impossible the full-scale participation of Russia in the processes of financial globalization. The author concludes that alternative way of Russia’s entry into the global financial system lays in playing the key role in the creation of the regional financial market of the Eurasian Economic Space.

scholarly journals Cuestiones actuales del régimen jurídico-administrativo de las Cajas de ahorros españolas

2005 ◽  
pp. 31
Author(s):  
Ana Belén Casares Marcos
Keyword(s):  
Corporate Governance ◽  
Market Economy ◽  
Financial Market ◽  
Financial System ◽  
Legal Framework ◽  
Market Reform ◽  
Credit Institution ◽  
Savings Banks ◽  
Legal Situation ◽  
And Performance

Las reformas legislativas que han afectado en los últimos tiempos a la organización y el funcionamiento del sistema financiero español han tenido una especial repercusión en el ámbito de las cajas de ahorros. La tramitación parlamentaria de la Ley 44/2002, de 22 de noviembre, de Medidas de Reforma del Sistema Fianciero, reavivó el debate sobre su régimen jurídico y la necesidad de acotar la intervención pública en su seno. Ahonda en ello la Ley 26/2003 , de 17 de julio, de Transparencia, que extiende al ámbito de las cajas la preocupación por el corporate governance. Ambas normas responden a la necesidad de dar respuesta a algunos de los problemas más inmediatos a que se enfrentan estas entidades, si bien adolecen de un defecto fundamental por cuanto no abordan de forma exhaustiva la regulación de la institución. Se perpetúa así la trayectoria tradicional de "parcheo" del régimen jurídico aplicable a las mismas, evitando entrar en la cuestión esencial de la definición de su naturaleza jurídica y abocando a las cajas, en consecuencia, al díficil reto de acompasar su vocación social tradicional a las nuevas exigencias legales en pro de una mayor eficiencia, racionalidad y neutralidad de su acitividad económica.<br /><br />Recent legal changes pertaining to the organization and performance of the Spanish financial system have had significant repercussions on the savings banks sector. The law on financial market reform passed in 2002, Ley Financiera, raised once again the debate on their legal situation and the urge to cut down public influence on their management. The 2003 Transparency Law, Ley de Transparencia, follows this reform and extends corporate governance to Spanish savings banks. Both Laws seek to confront some of the most important issues raised by these credit institutions, but they also share the flaw of not regulating its legal framework and status completely. They continue, therefore, to add "patches" to the savings banks legislation, challenging these institutions to combine its function as a credit institution in a market economy and its position as a social foundation

scholarly journals Evidence for and Against the Validity of Efficient Market Hypothesis

2018 ◽  
Vol 56 (3) ◽  
pp. 369-387
Author(s):  
Miljan Leković
Keyword(s):  
Market Efficiency ◽  
Financial Market ◽  
Efficient Market Hypothesis ◽  
Strong Form ◽  
Efficient Market ◽  
Market Anomalies ◽  
Development Path

Abstract The concept of an efficient financial market, in literature known as efficient market hypothesis (EMH), has had a long and difficult development path from the idea itself to its final conception, as one of the central paradigms in modern finance. It has been tested and critically reviewed for decades, and the two basic types of problems it has encountered are theoretical paradoxes and market anomalies. The aim of the paper is to examine the validity of EMH through various financial market efficiency tests and the results of previous research. The intention is to answer the question of whether, despite theoretical paradoxes and market anomalies, the notion of validity can be attributed to the concept of an efficient financial market. In this regard, the paper presents plenty of evidence for and against the validity of weak, semi-strong, and strong form of EMH, to conclude that, even after more than half a century of research, financial literature has not reached a consensus on the presence or absence of the validity of this hypothesis.

scholarly journals Journal of the History of Economic Thought Preprints - Limits to Arbitrage and Interest Rates: A Debate Between Keynes, Hawtrey and Hicks

2018 ◽  
Author(s):  
Lucy BRILLANT
Keyword(s):  
Business Cycle ◽  
Central Bank ◽  
Interest Rates ◽  
Economic Thought ◽  
History Of Economic Thought ◽  
Short Term ◽  
Limits To Arbitrage ◽  
History Of ◽  
The Business Cycle

This paper deals with a debate between Hawtrey, Hicks and Keynes concerning the capacity of the central bank to influence the short-term and the long-term rates of interest. Both Hawtrey and Keynes considered the central bank’s ability to influence short-term rates of interest. However, they do not put the same emphasis on the study of the long-term rates of interest. According to Keynes, long-term rates are influenced by future expected short-term rates (1930, 1936), whereas for Hawtrey (1932, 1937, 1938), long-term rates are more dependent on the business cycle. Short-term rates do not have much effect on long-term rates according to Hawtrey. In 1939, Hicks enters the controversy, giving credit to both Hawtrey’s and Keynes’s theories, and also introducing limits to the operations of arbitrage. He thus presented a nuanced view.

scholarly journals Risk Taking, Principal Agent Problems and Breakdown of Corporate Social Responsibility (CSR): How to Reestablish Safe-Assets and Capital Funding for Social Security?

Equilibrium ◽  
2013 ◽  
Vol 8 (2) ◽  
pp. 7-30 ◽  
Author(s):  
Hans-Georg Petersen ◽  
Alexander Martin Wiegelmann
Keyword(s):  
Financial Markets ◽  
Interest Rates ◽  
Financial Market ◽  
Debt Crisis ◽  
Principal Agent ◽  
Market Structures ◽  
Financial Products ◽  
Monetary System ◽  
Capital Funding ◽  
Corporate Social

The breakdown of the financial markets in fall 2007 and the following debt crisis in the EU has produced an enormous mistrust in financial products and the monetary system. The paper describes the background of the crisis induced by functional failures in risk management and the multifold principal agent problems existing in the financial market structures. The innovated nontransparent financial products have mixed up different risk weights and puzzled, or even fooled formerly loyal customers. Contemporaneously abundant liquidity on the international financial market accompanied by easy money policies of the Fed in the US and the ECB in the euro zone have depressed the real interest rate to zero or even negative values. Desperate investors are seeking for safe-assets, but their demand remains unsatisfied. Low real interest rates and the consequently lacking compound interest effect in the same time jeopardize private as well as public insurance schemes being dependent on capital funding: the demographic crisis becomes gloomy. Therefore, the managers of the financial markets have to reestablish CSR and to divide the markets into safe-asset areas for the usual clients and “casino” areas for those who like to play with high risks. Only with transparency and risk adequate financial products can the lost commitment be regained.

scholarly journals Current Investment Strategies for Private Individuals as Small Investors in Times of Low Interest Rates

2020 ◽  
pp. 32-44
Author(s):  
Ing. Martin A. Moser, MA. MSc
Keyword(s):  
Interest Rates ◽  
Wealth Accumulation ◽  
Investment Strategies ◽  
Television Programs ◽  
Individual Level ◽  
Advantages And Disadvantages ◽  
Low Interest Rates ◽  
Small Investors ◽  
Private Investors ◽  
The Right

Money plays an important role, both on a social and an individual level. Secure forms of investment hardly bring any interest. Also, state financial support has changed and will continue to do so in the future. A constructive, forward-looking approach to private finances and long-term wealth accumulation are therefore becoming increasingly important. Finding the right system at the right time is a challenge that small private investors have to face continuously. On the internet, in magazines or television programs, investors will find a flood of information. The fact that unlimited amounts of data can be accessed, often creates more confusion than perspective. This applies particularly to the investment business. Based on a literature review, this article provides an overview of current forms of investment for small private investors and uses qualitative research via problem-centered interviews to critically compare their advantages and disadvantages in times of low interest rates.

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