Liberalism and Regulation of Financial Market

2012 ◽  
pp. 20-30
Author(s):  
V. Milovidov
Keyword(s):  
Hedge Funds ◽  
Financial Services ◽  
Financial Stability ◽  
Financial Risk ◽  
Risk Hedging ◽  
Rights Protection ◽  
Starting Point ◽  
Derivative Instruments ◽  
Credit Default ◽  
Financial Transactions

Reagan's financial sector deregulation became a starting point for the financial engineering, derivatives, combinatory financial operations industry. Due to it hedge funds developed, and a range of risk financial transactions expanded among the banks that found both new forms of financial risk hedging and new sources of income: arbitrage and hedging, credit default swaps, operations with "second-rate” credits. It was them that exploded the market in 2007–2008. The reaction of states realized in a string of regulation initiatives, including creation of supranational coordination bodies (in particular, Financial Stability Board); reformatting of mega regulators and on their base – the shaping of state prudential supervision and financial services consumer rights protection bodies with different tasks; restrictions on hedge funds activities; toughening of derivative instruments regulation and implementing of a central counterparty institute on derivatives market.

Study of Anonymity and Supervision Based on Negotiable Securities Information System

2021 ◽  
pp. 321-331
Author(s):  
Chieh-Wen Hsu, Chenglian Liu, Sonia C-I Chen
Keyword(s):  
Financial Services ◽  
Financial Risk ◽  
Financial Regulation ◽  
Regulatory System ◽  
Important Work ◽  
Double Blind ◽  
Starting Point ◽  
Stage Order ◽  
The Face ◽  
Securities Industry

The financial services industry continues to innovate, every day the face of complex trading environment, risk-based supervision has become a serious and important work, how to use technology to enhance the efficiency of supervision and financial regulation capacity, reduce fraud and regulatory costs, effectively guard against financial risk management mechanism. This study takes this concept as the starting point and uses the framework and process of securities industry transactions to be divided into 8 stages: registration stage, account issuance stage, order placement stage, order confirmation stage, transaction return stage, report business stage, data query and supervision and inspection stage, combined with ElGamal play algorithm to meet the requirements of the securities regulatory process, propose a set can have stealth, can not be tampered with, security mechanism and double-blind and other securities regulatory system.

scholarly journals New Tech v. New Deal: Fintech as a Systemic Phenomenon

2018 ◽  
Author(s):  
Saule T. Omarova
Keyword(s):  
New Deal ◽  
Financial Services ◽  
Financial Stability ◽  
Scale Up ◽  
Financial Risks ◽  
Financial Assets ◽  
Policy Challenge ◽  
Private Actors ◽  
Financial Transactions ◽  
The New Deal

36 Yale Journal on Regulation 735 (2019).Fintech is the hottest topic in finance today. Recent advances in cryptography, data analytics, and artificial intelligence are visibly “disrupting” traditional methods of delivering financial services and conducting financial transactions. Less visibly, fintech is also changing the way we think about finance: The rise of fintech is gradually recasting our collective understanding of the financial system as simply another sphere of normatively neutral information technology and objective computer science. By making financial transactions faster, cheaper, and more easily accessible, fintech seems to promise a micro-level “win-win” solution to the financial system’s many ills.This Article challenges such narratives and presents an alternative account of fintech as a systemic, macro-level phenomenon. Grounding the analysis of evolving fintech trends in a broader institutional context, the Article exposes the normative and political significance of the current fintech moment. It argues that the arrival of fintech enables a potentially decisive shift in the underlying public-private balance of powers, competencies, and roles in the financial system.In developing this argument, the Article makes three principal scholarly contributions. First, it introduces the concept of the New Deal settlement in finance: a fundamental political arrangement, in force for nearly a century, pursuant to which profit-seeking private actors retain control over allocating capital and generating financial risks, while the sovereign public bears responsibility for maintaining systemic financial stability. Second, the Article advances a novel conceptual framework for understanding the deep-seated financial dynamics that have eroded the New Deal settlement in recent decades. In particular, it offers a working taxonomy of principal mechanisms that both (a) enable private market actors to continuously synthesize tradable financial assets and scale up trading activities, and (b) undermine the public’s ability to manage the resulting system-wide risks. Finally, the Article shows how and why specific fintech applications – cryptocurrencies, distributed ledger technologies, digital crowdfunding, and robo-advising – are poised to amplify the effect of these destabilizing mechanisms, and thus potentially exacerbate the tensions and imbalances in today’s financial markets and the broader economy. It is this potential that renders fintech a public policy challenge of the highest order.

PERDAGANGAN ETHEREUM DI INDODAX EXCHANGE DALAM PERSFEKTIF SYARIAH

2020 ◽  
Vol 3 (2) ◽  
Author(s):  
Muhamad Khoirul Umam
Keyword(s):  
Money Laundering ◽  
Financial Services ◽  
Islamic Law ◽  
Indonesian Government ◽  
Advantages And Disadvantages ◽  
Digital Asset ◽  
Research Questions ◽  
Financial Transactions

In view of Islamic law Ethereum as a digital asset that is traded in cyberspace.The value of cryptocurrency surges and fluctuates, it is influenced by buying and selling demand. Indodax exchange is an official digital asset site in Indonesia that trades more than 40 digital currencies.The purpose of this study is to analyze whether cryptocurrency is worthy of value as money having a certain value, and also seen from the Indonesian government through Bank Indonesia has issued regulation No. 16/8/PBI/2014, which explicitly prohibits the use of bitcoin, Ethereum and altcoin for use in financial transactions in cash. So that raises research questions how the cryptocurrency law in the form of coin ethereum in Islamic law. The results of this study explain ethereum has advantages and disadvantages. Among its advantages is that users can use exchanges or transactions without a third service (bank), and can be traded at merchandise stores.However, ethereum losses are more frequent, such as fluctuating values each time, not listed as commodities, not watched by the Financial Services Authority (OJK), they present elements of gharar (uncertainty) and maysir (gambling) or (betting), which are used for money laundering and purchase of illegal drugs.Keywords: Cryptocurrency, Ethereum, Digital asset

Financial Risks of the Bank: Assessment and Mechanism of Neutralization

2020 ◽  
Vol 22 (1) ◽  
pp. 6-12
Author(s):  
Nelia Volkova ◽  
◽  
Alina Mukhina ◽  
Keyword(s):  
Risk Assessment ◽  
Financial Stability ◽  
Financial Risk ◽  
Stable Operation ◽  
Financial Risks ◽  
Negative Consequences ◽  
Conceptual Approach ◽  
Relevant Today ◽  
Banking Institution ◽  
The Impact

Abstract. Introduction. The issue of financial risk management of commercial banks is quite relevant today, because the activity of banks is the most risky of all. The presence of risks in banking can lead to unexpected losses, namely the loss of own resources. That’s why for the stable operation of the bank without loss the priority is to assess the financial risks, which is the basis for their further neutralization. Purpose. The purpose of the article is to develop conceptual provisions for assessment financial risks and justifying the need to neutralize them. Results. The article analyzes the impact of risks on the financial stability of a banking institution. The main methods of bank risk assessment are considered. All these include the statistical method, the analytical method, the expert method, the analogue method and the combined method. The necessity of neutralization of financial risks in order to avoid negative consequences is substantiated. Also the methods of bank risks neutralization are considered. It should be noted that these methods of neutralization can not only be used, but also supplement the list with new methods must be done, which in the future will protect the bank from the influence of undesirable factors. A conceptual approach to the assessment and neutralization of financial risks is proposed. This conceptual approach aims to ensure effective assessment of the level of risk with their subsequent neutralization Conclusions. Use of a conceptual approach will allow an effective risk assessment and decision-making to avoid or accept risk. Thanks to using this approach, the banking institution will be able to react swiftly to the presence of financial risks and to prevent the occurrence of negative consequences, which may lead to a violation of the financial stability of the bank.

scholarly journals Exploring the Role of Islamic Fintech in Combating the Aftershocks of COVID-19: The Pen Social Innovation of the Islamic Financial System

2021 ◽  
Vol 7 (2) ◽  
pp. 136
Author(s):  
Mustafa Raza Rabbani ◽  
Abu Bashar ◽  
Nishad Nawaz ◽  
Sitara Karim ◽  
Mahmood Asad Mohd. Ali ◽  
...  
Keyword(s):  
Financial Services ◽  
Open Innovation ◽  
Financial Stability ◽  
Social Innovation ◽  
Global Financial Crisis ◽  
Financial System ◽  
Real Economy ◽  
Business Context ◽  
The World

The purpose of the current study is to investigate the role of the Islamic financial system in recovery post-COVID-19 and the way Fintech can be utilized to combat the economic reverberations created by COVID-19. The global financial crisis of 2008 has established the credentials of the Islamic financial system as a sustainable financial system which can save the long run interests of the average citizens around the world while adding value to the real economy. The basic ethical tenets available in the Islamic financial system make it more suited and readymade to fight the economic aftershocks of a pandemic like COVID-19. The basic principles of ethical Islamic finance have solid connections to financial stability and corporate social responsibility within the wide-reaching business context. With the emergence of Financial technology (Fintech) it has provided a missing impetus to the Islamic financial system to compete on equal ground with its conventional counterpart and prove its mettle. The study uses discourse analysis along with the content analysis to extract content and draw a conclusion. The findings of the study indicate that COVID-19 pandemic has provided the opportunity for the social and open innovation to grow and finance world have turned to open innovation to provide a speedy, timely, reliable, and sustainable solution to the world. The findings of the study provide significant implications for governments and policy makers in efficient application of Fintech and innovative Islamic financial services to fight the economic consequences of the COVID-19 pandemic.

scholarly journals Mutual fund investors perception in India-a study

2017 ◽  
Vol 7 (1.1) ◽  
pp. 60
Author(s):  
R. Udhayasankar ◽  
K. Maran
Keyword(s):  
Mutual Funds ◽  
Mutual Fund ◽  
Financial Risk ◽  
Fund Raising ◽  
Factors Affecting ◽  
Derivative Instruments ◽  
Different Types ◽  
Small Investors ◽  
Investment Option ◽  
Short Span

Mutual fund is four decades old in India.  It was started by UTI during the year 1964 with few schemes for small investors. During this short span of time it has made tremendous growth in Indian small investors. But now a day’s its volume of investors and sources of investment also growing tremendous level. Moreover mutual fund scheme have added new dimension to overcome financial risk of small investors and also in fund raising capacity of corporate sectors. Mutual fund investors can diversify even more by purchasing different kind of stocks which will helps to spreading out investors’ money across different types of derivative instruments and hence it reduces the risk tremendously up to certain extent and it is automatically diversify in a predetermined category of investments. This serves bridge work between small investors and corporate sectors likewise considering those points in this paper is an attempt to know the investors’ perceptions towards selected mutual funds. This paper makes an attempt to identify various factors affecting perception of investors regarding investment in mutual funds. The findings will helpful to identify the investors’ interest base and factors clearly and it reveals that the investors consider mutual funds as flexible investment option and it creates interest of investment among small investors.

scholarly journals Information Asymmetry and Trust: A Framework for Studying Microfinance in India

2005 ◽  
Vol 30 (4) ◽  
pp. 77-86 ◽  
Author(s):  
M S Sriram
Keyword(s):  
Social Networks ◽  
Transaction Costs ◽  
Rural Areas ◽  
Financial Services ◽  
Imperfect Information ◽  
Informal Networks ◽  
The Poor ◽  
The People ◽  
Financial Transactions

In recent times, microfinance has emerged as a major innovation in the rural financial marketplace. Microfinance largely addresses the issue of access to financial services. In trying to understand the innovation of microfinance and how it has proved to be effective, the author looks at certain design features of microfinance. He first starts by identifying the need for financial service institutions which is basically to bridge the gap between the need for financial services across time, geographies, and risk profiles. In providing services that bridge this gap, formal institutions have limited access to authentic information both in terms of transaction history and expected behaviour and, therefore, resort to seeking excessive information thereby adding to the transaction costs. The innovation in microfinance has been largely to bridge this gap through a series of trustbased surrogates that take the transaction-related risks to the people who have the information — the community through measures of social collateral. In this paper, the author attempts to examine the trajectory of institutional intermediation in the rural areas, particularly with the poor and how it has evolved over a period of time. It identifies a systematic breach of trust as one of the major problems with the institutional interventions in the area of providing financial services to the poor and argues that microfinance uses trust as an effective mechanism to address one of the issues of imperfect information in financial transactions. The paper also distinguishes between the different models of microfinance and identifies which of these models use trust in a positivist frame and as a coercive mechanism. The specific objectives of the paper are to: Superimpose the role of trust in various types of exchanges and see how it impacts the effectiveness of repeated transactions. While greater access to information fosters trust and thus helps social networks to reduce transaction costs, there could be limits to which exchanges could solely depend on networks and trust. Look at the frontiers where mutual trust cannot work as a surrogate for lower appraisal costs. Use an example in the Canadian context and see how an entity that started on the basis of social networks and trust had to morph into using the techniques used by other formal nonneighbourhood institutions as it grew in size and went beyond a threshold. Using the Canadian example, the author argues that as the transactions get sophisticated, it is possible to achieve what informal networks have achieved through the creative use of information technology. While we find that the role of trust both in the positivist and the coercive frame does provide some interesting insights into how exchanges with the poor could be managed, there still could be breaches in the assumptions. This paper identifies the conditions under which the breaches could possibly happen and also speculates on the effect of such breaches.

FINANCIAL STABILITY AND FINANCIAL INCLUSION: THE CASE OF SME LENDING

2018 ◽  
Vol 63 (01) ◽  
pp. 111-124 ◽  
Author(s):  
PETER J. MORGAN ◽  
VICTOR PONTINES
Keyword(s):  
Low Income ◽  
Financial Services ◽  
Financial Stability ◽  
Developing Economies ◽  
Empirical Studies ◽  
Bank Lending ◽  
Financial Inclusion ◽  
Nonperforming Loans ◽  
Z Scores ◽  
Negative Impacts

Developing economies are seeking to promote financial inclusion, i.e., greater access to financial services for low-income households and firms. This raises the question of whether greater financial inclusion tends to increase or decrease financial stability. A number of studies have suggested both positive and negative impacts on financial stability, but very few empirical studies have been made. This study focuses on the implications of greater financial inclusion for small and medium-sized enterprises (SMEs) for financial stability. It estimates the effects of measures of the share of bank lending to SMEs on two measures of financial stability — bank nonperforming loans and bank Z scores. We find some evidence that an increased share of lending to SMEs aids financial stability by reducing non-performing loans (NPLs) and the probability of default by financial institutions.

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