The Architecture of Financial Networks and Models of Financial Instruments According to the “Just Transition Mechanism” at the European Level

At the global level and in particular the European level, challenges related to climate change and the transition to green transactions have created an imperative where identifying or developing innovative financial instruments, appropriate for these priorities, have become our research priorities and objectives. Starting from the analysis of the European Investment Plan for green transactions, as well as the EU Directive 2018/410 of the European Parliament and of the Council, in conjunction with ongoing efforts to identify innovative financing tools, research is presented based on hypotheses using concepts and models of green financing. The paper aims to analyze the main concepts and phenomena that could be considered generative factors for current financial market trends, as well as the inventory of facts and acts that provide a picture of the financial market. Based on these investigations, this paper suggest how we can best analyze the economic environment, processes, and resources in terms of their predictions regarding the sustainability of financial markets in the context of current challenges. Moreover, our paper aims to highlight in our empirical research the above-mentioned aspects, including the analysis of the emergence of new financial instruments at the global level with a direct impact on financial sustainability at the European level, including reflecting certain particularities of financial markets Romania. This research will be both a scientific contribution to the specialized literature and a possible support tool for the practical activities of entrepreneurs in their economic endeavor of developing sustainable businesses.

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TESTING THE EFFICIENCY MARKET HYPOTHESIS: AN EXAMPLE OD BOSNIA AND HERZEGOVINA

EMC Review - Časopis za ekonomiju - APEIRON ◽

10.7251/emc1901069s ◽

2019 ◽

Vol 17 (1) ◽

Author(s):

Tijana Šoja ◽

Zumreta Galijašević ◽

Emina Ćeman

Keyword(s):

Financial Markets ◽

Bosnia And Herzegovina ◽

Financial Market ◽

Capital Market ◽

Strong Influence ◽

Weak Form ◽

Financial Instruments ◽

Price Movement ◽

Run Test ◽

Available Information

Governments of many countries, companies and business organizations last decades increasingly pay attention and recognize the importance of the capital market for economic growth and development. One of the factors that has strong influence on the capital market, as a platform for long-term borrowing and obtaining funds, is the price movement of financial instruments traded on capital market. The price movement of financial instruments is linked to the efficiency of the market, and is under strong influence of all available information about companies, which quickly reflect on the prices of financial instruments.Fama (1965) was one of the first economist who used term „efficient financial market“. He conducteda research on the financial market and pointed out that in an efficient market, on average, competition would cause that all effects of the latest market information will be included through the value of shares traded. The hypothesis of an efficient financial market suggests that the price of the shares, financial instruments, reflects all available information, so investor cannot realize extra profits if he has some certain insider information or on the basis of publicly available historical data and information. Many investors are trying to find those securities that are underestimated, and for which is expected to growth in the future. In a case of efficient financial market, it is quite impossible to find underestimated securities because information quickly incorporated into the price of securities. Ttesting of the efficiency of financial market is largely present in the developed markets, while somewhat weaker tests have been carried out on the examples of transitional financial markets. In published researches it is most often confirmed that transition countries have or have had poorly performing financial markets, especially in the initial stages of their development (Bahmani-Oskooee et al, 2016; Kvedaras and Basdevant, 2002).In this research we are testing the efficient market hypothesis for the financial market in Bosnia and Herzegovina. We tested hypothesis that the financial market is weakly efficient. For this test we are using stock index data from the Sarajevo and Banja Luka Stock Exchange, SASX10, BIRS and BATX index. The analysis includes daily, weekly and monthly index movements from 2006 to August 2018, for SASX 10 and BIRS indices, while BATX data is available from 2009 until August 2018. In the first step we calculate returns for all periods (deily, weekly and montly) between indicies and in another step we tested autocorrelation between their returns.Efficient market hypothesis has been tested through three statistical tests: autocorrelation test, run test and variance test. The results obtained by applying different tests do not give a single answer to the question whether financial market in Bosnia and Herzegovina perform at a low level of efficiency. Auto-correlation tests reject the hypothesis of weak form market efficiency,while the run test and the test of variance ratios confirm the weak form of market efficiency. Such findings suggest that it is not possible, with sufficient precision, to predict trends in the financial market in Bosnia and Herzegovina.

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The Essence and Significance of Financial Instruments for Enterprises in Poland in 2010-2018

Finanse i Prawo Finansowe ◽

10.18778/2391-6478.3.27.06 ◽

2020 ◽

Vol 3 (27) ◽

pp. 109-124

Author(s):

Marta Paduszyńska

Keyword(s):

Financial Markets ◽

Financial Market ◽

Capital Investments ◽

Financial Instruments ◽

Financial Leverage ◽

Central Statistical ◽

Central Statistical Office ◽

The Subject ◽

Key Indicators

The purpose of the article/hypothesis: The aim of the study is an attempt to show the degree of use of financial instruments by non-financial enterprises operating on the Polish market and to determine whether their application translates into the financial results achieved by these enterprises. The hypothesis was adopted that the importance and use of financial instruments by enterprises on the Polish market is not significant, however, as a result of global transformations and the growing importance of financial markets, the activity of entities in this respect will increase. Methodology: In order to determine the degree of use of financial instruments among enterprises, the data published by the Central Statistical Office (GUS) for the years 2010–2018 were used and the key indicators illustrating the involvement of enterprises in the instruments available on the financial market were calculated. The literature on the subject was also reviewed and analyzed. Results of the research: The conducted considerations that non-financial enterprises in the polish market showed an increase in involvement in financial activities, as evidenced by the growing share of financial instruments, both on the active and passive side. On the passive side, the use of credits and loans in financing the activities of entities increased. This increase, however, did not translate into the use of the effects of financial leverage in the surveyed enterprises and an increase in the profitability of equity. In the case of assets, in the analyzed period there was an increase in the involvement of free funds in investments, mainly due to an increase in equity financial instruments. However, the analysis of financial revenues in total revenues may suggest that greater involvement in the financial sphere does not translate into profitability of assets and the results of the surveyed entities. It should be emphasized, however, that the development of the financial market and the increasing availability and variety of financial instruments strengthen the interest of enterprises in capital investments.

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The relevance of the exit option: the challenge for European trade unions of post-Fordism, internationalisation of the economy and financial market capitalism

Transfer European Review of Labour and Research ◽

10.1177/102425890601200410 ◽

2006 ◽

Vol 12 (4) ◽

pp. 609-620 ◽

Cited By ~ 5

Author(s):

Jürgen Hoffmann

Keyword(s):

Financial Markets ◽

Financial Market ◽

Trade Unions ◽

Balance Of Power ◽

Labour Markets ◽

European Level ◽

Nation States ◽

European Trade ◽

Exit Option ◽

Market Capitalism

This paper examines the links between restructuring of production (post-Fordism), Europeanisation/globalisation of the economy and changes in the financial markets (financial market capitalism). It describes how, at European level, the greater scope for capital to relocate away from existing systems (labour markets, nation states), i.e. to make use of the ‘exit option’, dramatically shifts the balance of power between employees/trade unions and capital to the benefit of the latter. At the same time the paper also identifies the natural limits of the exit option that could offer trade unions scope for action.

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Financial policy regarding the categorization of individual investors in Russia and the area of protecting their interests

Herald of Omsk University. Series: Economics ◽

10.24147/1812-3988.2020.18(4).19-35 ◽

2020 ◽

Vol 18 (4) ◽

pp. 19-35

Author(s):

Irina G. Gorlovskaya

Keyword(s):

Financial Markets ◽

Financial Market ◽

Securities Market ◽

Financial Policy ◽

Individual Investors ◽

Financial Risks ◽

Financial Instruments ◽

Basic Principles ◽

The Face ◽

Areas Of Protection

Development of modern economy and financial market is impossible without involving the mass investor in investment processes. This is the goal of the state's financial market policy. The need to preserve savings in the face of a reduction in the key rate, and therefore a decrease in interest, encourages individuals to invest more actively in securities. New investors come to the securities market, but they are not always able to adequately assess the risk of investing in securities. To reduce the risks of individual investors, there is used a categorization mechanism, which divides them into qualified and unqualified investors, but requires improvement. Based on the analysis, it is proved that the categorization of investors cannot be limited by the regulation of the criteria for their differentiation and requires specifying the areas of protection of the interests and rights of investors. The study is based on the pragmatic Solow-Williamson methodology and a systematic approach. The indicators of investor activity and indicators characterizing the degree of investor protection in the Russian securities market are analyzed. As a result, the problems of modern categorization of individual investors in the Russian Federation are identified and analyzed. The main areas of protection of investors' interests and rights are identified, including: the choice of a financial instrument; ensuring ownership of financial instruments; transactions with financial instruments; protection from misseling; disclosure of information by issuers and professional subjects of financial markets; illegal actions of professional subjects of financial markets in relation to financial risks and protection tools. Areas of protection of investors' interests and rights are correlated with risks and protection tools. There were defined basic principles of categorization of investors-individuals.

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Financial Markets in the Internet Age

Intelligent Information Technologies ◽

10.4018/978-1-59904-941-0.ch122 ◽

2011 ◽

pp. 2119-2142

Author(s):

Ross A. Lumley

Keyword(s):

Financial Markets ◽

Financial Market ◽

New Technologies ◽

Intelligent Agent ◽

Financial Instruments ◽

Multi Agent Systems ◽

Agent Systems ◽

Internet Age ◽

Technological Advances ◽

Multi Agent

The chapter reviews how the financial markets historically have been affected by new technologies and shows that, time and again, technological advances have impacted the very workflow of the financial market processes including the available financial instruments. Present technologies are discussed leading to a framework for how they form the basis for building intelligent agent systems. An overview of multi-agent systems is provided followed by several examples of multi-agent systems supporting investors in financial markets.

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Financial Markets in the Internet Age

Creating Knowledge Based Organizations ◽

10.4018/978-1-59140-162-9.ch004 ◽

2011 ◽

pp. 80-108

Author(s):

Ross A. Lumley

Keyword(s):

Financial Markets ◽

Financial Market ◽

New Technologies ◽

Intelligent Agent ◽

Financial Instruments ◽

Multi Agent Systems ◽

Agent Systems ◽

Internet Age ◽

Technological Advances ◽

Multi Agent

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Real-Estate Derivatives

10.1093/oso/9780198742920.001.0001 ◽

2017 ◽

Author(s):

Radu S. Tunaru

Keyword(s):

Real Estate ◽

Financial Markets ◽

Investment Banks ◽

Financial Instruments ◽

Stress Tests ◽

Real World Data ◽

No Arbitrage ◽

New Frontier ◽

Property Price ◽

Comparative Description

This book brings together the latest concepts and models in real-estate derivatives, the new frontier in financial markets. The importance of real-estate derivatives in managing property price risk that has destabilized economies frequently in the last hundred years has been brought into the limelight by Robert Shiller over the last three decades. In spite of his masterful campaign for the introduction of real-estate derivatives, these financial instruments are still in a state of infancy. This book aims to provide a state-of-the-art overview of real-estate derivatives at this moment in time, covering the description of these financial products, their applications, and the most important models proposed in the literature in this area. In order to facilitate a better understanding of the situations when these products can be successfully used, ancillary topics such as real-estate indices, mortgages, securitization, and equity release mortgages are also discussed. The book is designed to pay attention to the econometric aspects of realestate index prices, time series, and also to financial engineering no-arbitrage principles governing pricing of derivatives. The emphasis is on understanding the financial instruments through their mechanics and comparative description. The examples are based on real-world data from exchanges or frommajor investment banks or financial houses in London. The numerical analysis is easily replicable with Excel and Matlab. This is the most advanced published book in this area, combining practical relevance with intellectual rigour. Real-estate derivatives will become important for managing macro risks in order to pass stress tests imposed by regulators.

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Valuing Peace: The Effects of Financial Market Exposure on Votes and Political Attitudes

Econometrica ◽

10.3982/ecta16385 ◽

2019 ◽

Vol 87 (5) ◽

pp. 1561-1588 ◽

Cited By ~ 4

Author(s):

Saumitra Jha ◽

Moses Shayo

Keyword(s):

Financial Markets ◽

Financial Market ◽

Political Attitudes ◽

Peace Process ◽

Superior Performance ◽

Financial Assets ◽

Material Incentive ◽

Nonfinancial Information ◽

Political Messages ◽

Economic Risks

Can participation in financial markets lead individuals to reevaluate the costs of conflict, change their political attitudes, and even their votes? Prior to the 2015 Israeli elections, we randomly assigned Palestinian and Israeli financial assets to likely voters and incentivized them to actively trade for up to 7 weeks. No political messages or nonfinancial information were included. The treatment systematically shifted vote choices toward parties more supportive of the peace process. This effect is not due to a direct material incentive to vote a particular way. Rather, the treatment reduces opposition to concessions for peace and changes awareness of the broader economic risks of conflict. While participants who were assigned Palestinian assets are more likely to associate their assets' performance with peace, they are less engaged in the experiment. Combined with the superior performance of Israeli stocks during the study period, the ultimate effects of Israeli and Palestinian assets are similar.

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Critical Value-Based Power Options Pricing Problems in Uncertain Financial Markets

Journal of Uncertain Systems ◽

10.1142/s1752890921500021 ◽

2021 ◽

pp. 2150002

Author(s):

Guimin Yang ◽

Yuanguo Zhu

Keyword(s):

Financial Markets ◽

Financial Market ◽

Numerical Experiments ◽

Critical Value ◽

The Other ◽

Options Pricing ◽

Underlying Asset ◽

Pricing Problems ◽

Fractional Differential ◽

The One

Compared with investing an ordinary options, investing the power options may possibly yield greater returns. On the one hand, the power option is the best choice for those who want to maximize the leverage of the underlying market movements. On the other hand, power options can also prevent the financial market changes caused by the sharp fluctuations of the underlying assets. In this paper, we investigate the power option pricing problem in which the price of the underlying asset follows the Ornstein–Uhlenbeck type of model involving an uncertain fractional differential equation. Based on critical value criterion, the pricing formulas of European power options are derived. Finally, some numerical experiments are performed to illustrate the results.

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PUBLIC LAW STATUS OF AN EXTREMELY POOR PERSON – A REVIEW OF ADAM PLOSZKA’S DOCTORAL MONOGRAPHY

Roczniki Administracji i Prawa ◽

10.5604/01.3001.0014.8446 ◽

2020 ◽

Vol 4 (XX) ◽

pp. 321-335

Author(s):

Alexander Martin Juranek

Keyword(s):

Public Law ◽

Economic Situation ◽

Global Level ◽

European Level ◽

Minimum Standard ◽

The Poor ◽

Constitutional Level ◽

Legal Situation ◽

Poor Person

The main purpose of this article is to refer to the Author’s considerations presented in his doctoral monography entitled “Public law status of an extremely poor person”. First of all, the appropriateness of the research hypotheses and questions adopted by the Author will be analysed with particular emphasis attached to the validity of the conclusions drawn in the context of the current social and economic situation in Poland. The second part is dedicated to considerations of a „strictly content-related nature”: from the analysis of solutions to counteract poverty at the global level, through the regional (European) level, to the national (constitutional) level. At this stage, reference will also be made to the standard of protection of the rights of the extremely poor suggested by the Author. The next part will analyse the extent of the discrepancies between the ‘minimum standard’ of protection suggested by the Author and the factual and legal situation of the poor. Conclusions in this area will be particularly useful for law application practice.

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