scholarly journals Impact of Innovative Financial Products on Financial Systems: Exchange Traded Products and the Polish Financial System

2016 ◽  
pp. 114-132 ◽  
Author(s):  
Adam Marszk
Keyword(s):  
Financial Markets ◽  
Structural Changes ◽  
Financial System ◽  
Exchange Traded Funds ◽  
Financial Systems ◽  
Financial Products ◽  
The Usa ◽  
Key Topics ◽  
Fast Transmission

Exchange Traded Products (ETPs) are one of the most recent and most rapidly developing financial products. As their assets grow they have an increasing impact on financial systems in many countries, including the USA, UK or Japan. Development of ETPs is linked with many opportunities and threats for the local financial systems. Their correct assessment is becoming more difficult due to the growing complexity of the available products, thus posing problems not only for the participants of the financial markets (including buyers and sellers of ETPs as well as intermediaries) but also for the supervising authorities. The main ETP development trends (e.g. size of the global assets under management) are outlined in this article. Structural changes are discussed in the context of their impact on both local and global financial systems. One of the key topics is the consequences of the changing landscape of the most popular type of ETP – Exchange Traded Funds (ETFs). Simple and safe physical ETFs are being replaced by complicated synthetic ETFs, significantly increasing possible risks for the holders of such products, for other entities involved in their creation and distribution, and, consequently, for the whole financial system. The last part of the article is devoted to the Polish perspective on this topic. It may be argued that in Poland the role of ETPs (even ETFs) is still marginal. ETPs can influence the Polish financial system, however, through a number of links between Polish and foreign financial institutions and markets. As a result, fast transmission of the future shocks caused by such products is increasingly more probable.

scholarly journals The Financial System in Albania

2015 ◽  
Vol 5 (2) ◽  
pp. 189
Author(s):  
Sanie Doda
Keyword(s):  
Financial Markets ◽  
General Public ◽  
Banking Sector ◽  
Financial System ◽  
Public Trust ◽  
Financial Intermediaries ◽  
Legal Basis ◽  
Financial Systems ◽  
Key Sectors

The Albanian public has gone through a lot of important economical crises and is still very sensitive from factors, even small ones that affect their beliefs in key sectors of the economy. However progress has been made towards the opinion of the general public, in recognition of the financial mediators and financial markets from a good part of the population, since public trust is important to a lot of sectors. Our financial system has gone through a lot of phases, starting from the fall of communism when the country entered a transition phase and the need of a new genuine financial system arose, since there was not any in existence, to continue with the need of development of the banking sector as the most important sector and while creating later a legal basis to help in the progress of this failed system.Developed countries constantly perfection their financial systems. It is astonishing how far they have gone and achieved in their development and in the regulation of some imperfections. Everything seems like it has an answer and the opportunities for investments are huge. Technology has also influenced because it has made everything easier. The role of financial intermediaries is well defined and they are precisely financial intermediaries that help in the regulation of imperfections of the financial markets, and the financial markets are structured in such a way that makes possible the realization of transactions and investments in an instant and very easy way and have a wide sufficient function. 

scholarly journals Climate Litigation in Financial Markets: A Typology

2019 ◽  
Vol 9 (1) ◽  
pp. 103-135 ◽  
Author(s):  
Javier Solana
Keyword(s):  
Financial Markets ◽  
Research Area ◽  
Financial Systems ◽  
Public Authorities ◽  
The Past ◽  
The World ◽  
Private And Public ◽  
Sustainable Finance ◽  
New Research

AbstractOver the past few years, the number of climate cases being filed against corporations and public authorities around the world has been on the rise. Aware of the central role of finance in economic development, the financial sector has remained vigilant. Traditionally, climate litigation in financial markets had been rare, but that seems to be changing: in 2018 there were more cases filed than in any previous year. The development of existing and forthcoming private and public sector initiatives with the aim of promoting sustainable finance may usher in even greater numbers in the next few years. This article provides the first systematic overview of climate cases in financial markets and introduces a typology to classify this type of climate case. This classification reveals common issues across different financial systems and raises questions for further enquiry that define a new research area within the emerging literature on climate litigation.

scholarly journals Exchange-Traded Funds on European Markets: Has Critical Mass been Reached? Implications for Financial Systems

Entropy ◽  
2020 ◽  
Vol 22 (6) ◽  
pp. 686
Author(s):  
Adam Marszk ◽  
Ewa Lechman
Keyword(s):  
Critical Level ◽  
Methodological Approach ◽  
Critical Mass ◽  
Exchange Traded Funds ◽  
Mass Analysis ◽  
Financial Systems ◽  
Substantial Evidence ◽  
Investment Funds ◽  
Financial Products ◽  
European Markets

Exchange-traded funds (ETFs) are one of the most rapidly expanding categories of financial products in Europe. One of the key yet still unanswered questions is whether European ETF markets have reached the size at which they could affect the financial systems. In our study, we examine 13 European countries during the period 2004–2017 in order to trace whether the share of ETFs in the total assets of investment funds has reached the ‘critical’ level that makes possible their further growth and can be associated with an influence on the financial system. We use a novel methodological approach that identifies the ‘critical mass’ along diffusion trajectories. Our results show that, in 10 countries, the share of ETFs in assets of investment funds increased. Still, in most countries, the share of ETFs did not exceed 1%. Estimates of the diffusion models indicate that the process of growing shares of ETFs was most dynamic and relatively most stable in Switzerland and United Kingdom. Results of the critical mass analysis imply that its achievement may be forecasted exclusively in these two cases. However, even in such cases there is no substantial evidence for a possible significant influence of ETFs on the local financial systems.

Financial Structure and Incentives

2012 ◽  
Vol 221 ◽  
pp. R23-R30
Author(s):  
Martin Čihák ◽  
Asli Demirgüç-Kunt
Keyword(s):  
Financial Markets ◽  
Financial Institutions ◽  
Risk Taking ◽  
Global Financial Crisis ◽  
Financial Sector ◽  
Financial Systems ◽  
Regulatory Approach ◽  
Private Incentives ◽  
The Global Financial Crisis

The article connects two streams of recent research on the financial sector. The first is the regulation literature, which emphasises the central role of incentives in the financial sector. It points out that the challenge of financial sector regulation, highlighted by the global financial crisis, is to align private incentives with public interest without taxing or subsidising private risk-taking. The second stream of research relates to financial structures and examines the mix of financial institutions and financial markets in an economy. It finds that, as economies develop, services provided by financial markets become comparatively more important than those provided by banks. The article brings these two streams together, pointing out that — as financial systems develop from bank-based to market-based — a traditional regulatory approach that relies on banking ratios becomes less effective. There is thus a greater need for properly monitoring and addressing the underlying incentive weaknesses in market-based systems.

Investing for a Greener, Competitive and Socially Inclusive Europe

2020 ◽  
Vol 89 (3) ◽  
pp. 51-59
Author(s):  
Debora Revoltella ◽  
Patricia Wruuck
Keyword(s):  
Financial Markets ◽  
Market Failure ◽  
Structural Changes ◽  
Economic Transformation ◽  
Global Competition ◽  
Economic Resilience ◽  
European Development ◽  
Effective Policy ◽  
Development Banks

Summary: Development banks are there for good times as well as bad times. They promote structural changes in economies, addressing longer-term challenges. They complement financial systems, helping to improve the functioning of banking and financial markets and bolstering economic resilience. They mitigate market failure, but can also help to identify it, contributing to the design of effective policy. Moreover, development banks can help to create and shape markets, such as the green bonds market. In doing so, they catalyse structural economic transformation and spur investment-led growth. For the post-Covid-19 world, Europe needs structural transformation to address the challenges of rapid technological change and stiffer global competition, growing threats to social cohesion and, not least, climate change. In this article, with a focus on the role of the EIB, we discuss three main questions: What is the rationale for development banks? What is the EIB’s unique position within the European development banking landscape? And how is the EIB helping to address the key challenges that Europe is currently facing, boosting recovery from the historic Covid-19 shock to create a more competitive, inclusive and greener economy in Europe?

scholarly journals Financial situation of insurance sector for example, a Stock – Exchange Company PZU

2014 ◽  
Vol 15 (1) ◽  
pp. 55-67 ◽  
Author(s):  
Paweł Trippner
Keyword(s):  
Economic Development ◽  
Financial Markets ◽  
Financial Institutions ◽  
Stock Exchange ◽  
Financial System ◽  
Insurance Companies ◽  
The European Union ◽  
Financial Systems ◽  
Insurance Sector ◽  
Financial Condition

Abstract The insurance system is a very important element of the financial system of a country. As institutions of public trust, insurance companies play a crucial role in the process of transforming savings into investments, which directly affects the country’s economic development. Maintaining the insurance sector in a good financial condition guarantees stability of the financial system and economic development of Poland. The article aims to present the essence of operations of insurance companies as financial institutions, present their role in the economy, and describe various methods of appraising their financial condition. In order to fulfil the above goals, a research hypothesis is put forward stating that the financial condition of the insurance sector in Poland deteriorated in the analysed period as a result of an adverse impact of turbulence in financial markets and problems in financial systems in the European Union countries.

scholarly journals Network geometry and market instability

2021 ◽  
Vol 8 (2) ◽  
pp. 201734
Author(s):  
Areejit Samal ◽  
Hirdesh K. Pharasi ◽  
Sarath Jyotsna Ramaia ◽  
Harish Kannan ◽  
Emil Saucan ◽  
...  
Keyword(s):  
Financial Markets ◽  
Ricci Curvature ◽  
Stock Prices ◽  
System Level ◽  
Financial Systems ◽  
Major Market ◽  
Pairwise Interactions ◽  
The Usa ◽  
Market Instability ◽  
Business As Usual

The complexity of financial markets arise from the strategic interactions among agents trading stocks, which manifest in the form of vibrant correlation patterns among stock prices. Over the past few decades, complex financial markets have often been represented as networks whose interacting pairs of nodes are stocks, connected by edges that signify the correlation strengths. However, we often have interactions that occur in groups of three or more nodes, and these cannot be described simply by pairwise interactions but we also need to take the relations between these interactions into account. Only recently, researchers have started devoting attention to the higher-order architecture of complex financial systems, that can significantly enhance our ability to estimate systemic risk as well as measure the robustness of financial systems in terms of market efficiency. Geometry-inspired network measures, such as the Ollivier–Ricci curvature and Forman–Ricci curvature, can be used to capture the network fragility and continuously monitor financial dynamics. Here, we explore the utility of such discrete Ricci curvatures in characterizing the structure of financial systems, and further, evaluate them as generic indicators of the market instability. For this purpose, we examine the daily returns from a set of stocks comprising the USA S&P-500 and the Japanese Nikkei-225 over a 32-year period, and monitor the changes in the edge-centric network curvatures. We find that the different geometric measures capture well the system-level features of the market and hence we can distinguish between the normal or ‘business-as-usual’ periods and all the major market crashes. This can be very useful in strategic designing of financial systems and regulating the markets in order to tackle financial instabilities.

scholarly journals The Activation of Deglobalization Processes and System-Forming Role of High-Tech Companies in the Modern Market Fragmentation Processes

2020 ◽  
Vol 10 (513) ◽  
pp. 81-88
Author(s):  
O. B. Mnykh ◽  
◽  
V. T. Lozynskyj ◽  
V. P. Dalyk ◽  
◽  
...  
Keyword(s):  
Financial Markets ◽  
Structural Changes ◽  
Political Influence ◽  
Digital Economy ◽  
High Tech ◽  
Foreign Direct Investments ◽  
Global Business ◽  
Subject Analysis ◽  
Market Fragmentation

The search for answers to modern challenges to both the global and the national economy is reflected in the focus of scientific and applied researches, their object and subject analysis. Such a search requires studying of qualitative changes in the processes of globalization and their combination with the origin in different countries of the trend of deglobalization. This trend is strengthened by the political influence of the countries with the use of policy of economic and technological protectionism, sophisticated rules of the game and instruments for gaining market advantages in both high-tech and financial markets. The present scientific research is aimed at analyzing the reasons for activating the structural policy of deglobalization, building up a related contentual model. The main reasons for accumulation of corporate debts by giants of global business are defined and their dual role in the development of both industrial and financial markets is reflected, the interaction between which is intensifying in the digital economy and with the emergence of new sources of crisis. The characterization of the gaps between the volume of exports and imports, the coefficient of coverage by exports of imports, the value of which depends on positive structural changes based on the processes of deglobalization and innovative activity of high-tech markets, are provided. Dynamic trends were built up to reflect the interdependence of volumes of foreign direct investments and the level of openness of the Ukrainian economy. The relationships of fragmentation factors of industrial and financial markets under the influence of the growing role of high-tech companies in the implementation of the policy of economic protectionism are shown. A contentual model of diffusion of threats to the development of high-tech markets and their consequences in the new environment of forking out material and digital economy is built up, which deepens understanding of the reasons for the combination of globalization and deglobalization processes both in the world and in individual countries.

Stricter microprudential supervision versus macroprudential supervision

2015 ◽  
Vol 23 (4) ◽  
pp. 354-368 ◽  
Author(s):  
Larry D Wall
Keyword(s):  
Financial Crisis ◽  
Financial Markets ◽  
Financial Stability ◽  
Design Methodology ◽  
Economic Damage ◽  
Financial Systems ◽  
Content Type ◽  
Depth Analysis ◽  
The Usa ◽  
Practical Implications

Purpose – The purpose of this paper is to develop an explicitly macroprudential supervisory framework designed to identify threats to financial stability use existing mechanisms to reduce the risk of these threats and to provide information to the authorities to more efficiently mitigate any instability that does arise. Design/methodology/approach – This paper begins with an analysis of the limitations of microprudential regulation. It then develops a macroprudential surveillance framework focused on those financial markets that have the potential to undermine financial stability. It concludes with a discussion of how the surveillance results may be used to enhance financial stability. Findings – The current supervisory focus on microprudential supervision of systemically important institutions is insufficient; an explicitly macroprudential focus is required. Research limitations/implications – Although this paper’s conceptual framework is applicable to all advanced financial systems the discussion of specific regulatory structures focuses on the USA. Practical implications – An explicit supervisory focus on the threats posed by major financial markets is feasible and desirable. Social implications – The probability of a financial crisis and the economic damage caused by a crisis can be significantly reduced by redirecting some regulatory efforts toward in-depth analysis of major financial markets. Originality/value – The paper emphasizes that macroprudential supervision must include both quantitative and detailed analysis of the qualitative aspects of key markets.

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