scholarly journals ANALYSIS OF NON-BANK FINANCIAL INSTITUTIONS ACTIVITY AS PARTICIPANTS OF MODERN FINANCIAL SERVICES MARKET

2018 ◽  
pp. 88-94 ◽  
Author(s):  
Liudmyla Didenko ◽  
Inna Kobzar ◽  
Iryna Khanaliieva
Keyword(s):  
Financial Institutions ◽  
Financial Services ◽  
Banking System ◽  
Foreign Banks ◽  
Stable Operation ◽  
Credit System ◽  
Pension Insurance ◽  
Wide Range ◽  
State Pension ◽  
Credit Institutions

Banking system, that is, the National Bank of Ukraine, other banks and branches of foreign banks operating in the country, is the basis of the Ukrainian credit system. However, non-bank financial and credit institutions play an important role in the financial services market. Today they provide quite a wide range of services and thus become serious competitors for banks. Therefore, the study of the peculiarities of the activities of non-bank financial and credit institutions and their role in the economic growth of the state is an urgent problem for investigation. The article assesses the activities of the main non-bank financial institutions. The main indicators of the effectiveness of non-banking financial institutions in the context of the main segments of the modern financial services market are analysed. The problems that impede the development of the insurance services market, the non-state pension insurance market and the Lombard loan market are identified. It is concluded that it is an urgent necessary to solve the system problems in the financial services market in order to ensure its effective and stable operation in the future.

scholarly journals FINTECH INDUSTRY IN UKRAINE: PROBLEMS AND PROSPECTS FOR THE IMPLEMENTATION OF INNOVATIVE SOLUTIONS

2020 ◽  
Vol 6 (4) ◽  
pp. 46-55
Author(s):  
Vira Vartsaba ◽  
Olha Zaslavska
Keyword(s):  
International Development ◽  
Financial Institutions ◽  
Financial Services ◽  
Digital Literacy ◽  
Public Awareness ◽  
Banking System ◽  
Radical Change ◽  
Legal Framework ◽  
Model Assessment ◽  
Credit System

The article considers the issues of development of the financial technology market, its opportunities and obstacles, as well as the need and inevitability of the in-troduction of fintech solutions in the financial and credit spheres. The main purpose of the research is to determine the role of fintech services in the state economy, the prospects for their development, as well as to substantiate the trends of adaptation of classical credit institutions and consumers of financial services to new financial tech-nologies at different stages of their development. Systematization of literature sources and approaches to solving the problem of intensifying activities in the field of innovative finance has shown that fintech is a specific cross-sectoral industry, which lies on the border of financial and IT spheres, consists of companies that use technology to improve the efficiency of financial services and encompasses digital innovations and programs that facilitate the creation and implementation of financial products. The urgency of solving this scientific problem is that the market of finan-cial technologies is one of the fastest growing. That is why it highlights the need for traditional financial institutions to digitize their activities through a radical change in the business model in order to strengthen competitive positions and provide strategic advantages. The research of the implementation of financial technologies in the article is carried out in the following logical sequence: systematization of stages of development of the fintech industry; assessment of the development of the fintech sphere in Ukraine in the context of the transition to the stage of integration with the banking system; study of the strengths and weaknesses of domestic banks and fintech companies, outlining obstacles and necessary changes for further digitization of the financial and credit system; research of the process of implementation of fintech services on the example of the technology life cycle model; assessment of the relationship between the level of financial and digital literacy of the population and the depth of promotion of innovative fintech products; identifying ways to increase the financial and digital inclusion of the population of Ukraine. Methods of the empirical, experimental and theoretical levels became the methodological tools of the conducted research. The results were evaluated and analyzed on the basis of surveys conducted in 2017-2019 by the Ukrainian Association of Fintech and Innovative Companies, the Ministry of Digital Transformation of Ukraine, the Ukrainian division of the British audit and consulting company Ernst & Young, and the US Agency for International Development. The article presents the results of an empirical analysis of the relations and interdependence of classical and innovative financial institutions, which showed the inevitability of the processes of digitization of financial services. The study em-pirically confirms and theoretically proves that the favorable development of the fintech industry is based on the following: the level of public awareness in the field of finance and information technology; the level of innovative development of financial institutions and the degree of penetration of the fintech companies in the financial market of the country; completeness of the legal framework.

Critical Analysis of the Zero Risk Weight Privilege for European Sovereign Debt in Light of Art. 124 TFEU

2020 ◽  
Vol 17 (1) ◽  
Author(s):  
Patrick Hauser
Keyword(s):  
Financial Institutions ◽  
Sovereign Debt ◽  
Banking System ◽  
Financial System ◽  
Significant Risk ◽  
Capital Adequacy ◽  
Individual Member ◽  
Member States ◽  
The Individual ◽  
Credit Institutions

AbstractThe zero risk weight privilege for European sovereign debt in the current capital adequacy requirements for credit institutions incentivises credit institutions to acquire and hold sovereign debt. However, it also poses a significant risk to the stability of the banking system and thus the financial system as a whole. It is argued that this privilege should not only be abolished due to the risk it entails but that it is also non conformant with EU primary law. Art. 124 TFEU prohibits privileged access of the EU and Member States' public sector to financial institutions except for prudential considerations. The protective purpose of Art. 124 TFEU to ensure sound budgetary policies by subjecting public borrowing to the same rules as borrowing by other market participants is thwarted by the uniform zero risk weight privilege. Further, as this privilege does not take into account the varying creditworthiness of the individual Member States it does not promote the soundness of financial institutions so as to strengthen the soundness of the financial system as whole, but rather endangers systemic stability. The zero risk weight privilege is therefore not based on prudential considerations and hence violates Art. 124 TFEU.

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.

Institution of Banking Pension Provisions: Preconditions, Nature, Competition with Traditional Institutions

2015 ◽  
Vol 2015 (2) ◽  
pp. 27-55
Author(s):  
Yuriy Ezrokh
Keyword(s):  
Financial Institutions ◽  
Pension Fund ◽  
Pension System ◽  
Pension Reform ◽  
Banking System ◽  
Pension Funds ◽  
Econometric Analysis ◽  
Traditional Institutions ◽  
State Pension ◽  
Pension Benefits

The article analyzes the pension reform implemented in Russia in 2013–2014, provides the modeling of possible pensions, determines the efficiency boundaries for the use of insurance and savings-insurance schemes offered by the Pension Fund of Russia. The author examines the activities and effectiveness in managing pension savings and reserves from non-state pension funds, especially the system of voluntary savings insurance. The study identifies the challenges faced by these financial institutions, which constrain the development of the Russian pension system. Drawing on logical and econometric analysis the author identifies the competitive opportunity for banks to participate in the Pension Benefits Act, calculates the proposals’ efficiency for future retirees and the banking system as a whole, determines the contribution of the proposed solutions to enhanced competition and more competitive banking environment.

scholarly journals Institutional formation of the market for debt settlement of consumers of financial services of credit institutions in Ukraine

2019 ◽  
pp. 123-131
Author(s):  
Myroslava Khutorna
Keyword(s):  
Financial Services ◽  
Financial Stability ◽  
Poor Quality ◽  
Bank Loans ◽  
Debt Management ◽  
Barriers To Entry ◽  
Institutional Formation ◽  
Wide Range ◽  
Credit Institutions

Purpose. The aim of the article is substantiation of the content of institutional measures, the implementation of which will improve the quality of assets of credit institutions of Ukraine. Methodology of research. The methodological basis of the research is formed on the basis of an institutional approach to substantiate the institutional preconditions for the functioning of the market for debt settlement of consumers of financial services of credit institutions; systematization to identify constraints and incentives for the effective use of various ways to solve the problem of non-performing bank loans; a statistical and analytical approach to quantify the level of quality of the current state of settlement of problem debt by different groups of banks in Ukraine; methods of scientific abstraction and logical generalization to describe the organizational and economic features of the formation of the market for debt settlement of consumers of financial services of different types of credit institutions of Ukraine. Findings. It is substantiated that ensuring the financial stability of credit institutions of Ukraine requires the development of a transparent market for debt settlement of consumers of financial services of credit institutions. The organizational-economic and institutional peculiarities of the formation of such a market are determined by detailing the following parameters: the legal basis of the activity of market participants; organizational form and institutional subordination of the debt management entities; administrative barriers to entry; the competitive conditions of activity of the entities for debt management and regulation of their relations with related parties; requirements for the personnel of debt management entities; the content of instruments to reduce the risks of their activities and to stimulate an increase in the volume of debt settlement of consumers of financial services of credit institutions; ways to organize debt sales; fiscal stimulus. It is proved that the most appropriate way to settle non-performing loans of state-owned banks is to involve the Deposit Guarantee Fund in this activity. This is explained by: the existence of an established mechanism for settlement of non-performing assets of liquidated banks; a well-functioning non-performing credit infrastructure that operates on the basis of transparency, uniformity of rules and public accountability; long experience of selling non-performing bank loans, including loans to related parties and corporate loans with poor quality or lack of collateral; a mechanism for independent economic investigations has been established; highly qualified specialists; no additional taxpayer spending. Originality. The institutional framework for the development of the debt management market for consumers of financial institutions of credit institutions has been improved, which, unlike the existing one, includes: substantiation of the organizational and legal framework of the activity of the debt management entity; identifying instruments for harmonizing the process of debt management from a wide range of stakeholders; disclosure of institutional and organizational features and institutional prerequisites for effective resolution of problematic debt of state-owned banks. This will help to improve the quality of consumer protection and their confidence in the monetary intermediation institution; will encourage credit institutions to improve the valuation of the market value of financial assets, including by enhancing liaison with credit bureaus. Practical value. The main provisions and conclusions of the conducted study are brought to the level of practical recommendations, take into account the current legislation and its prospective changes, and can be effectively used to solve the problems related to debt management of consumers of financial services of credit institutions in the domestic credit segment of the financial sector. Key words: credit institutions; state banks; non-performing loans; debt settlement market; debt settlement companies; institutional interaction of the entities of the debt settlement market; financial stability.

Islamic Finance Fundamentals With Applications in Malaysia

2016 ◽  
Author(s):  
Shahriza Osman ◽  
Zahiruddin Ghazali ◽  
Syed Mohd Na’im Syed Salim
Keyword(s):  
Financial Institutions ◽  
Financial Services ◽  
Banking System ◽  
Basic Knowledge ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Risk And Uncertainty ◽  
Financial Systems ◽  
Political Economic ◽  
Financial Issues

Islam postulates a unique link of contracts among the creator, man and society on the basis of Syariah law that directly affects the workings of the various social, political, economic, and financial systems. Therefore, to understand the way in which economic affairs and financial institutions are organized in an Islamic system, it is first necessary to comprehend the nature of this relationship. Consequently, one cannot study a particular aspect or part of an Islamic system, economics, for example, in isolation, without having understanding of the basic knowledge of Islamic finance. Islamic finance products are contract-based. This book explains Islamic finance, which refers to the provision of financial services in accordance with Syariah law in chapter one. The Syariah law is the foundation for the establishment of an Islamic banking system. Chapter two illustrates the differences between the principles of Syariah and Tabii. Chapter three explains the Islamic theory of profit. Chapter four is about risk and uncertainty, which is known as gharar in Islamic finance. Chapter five discusses interest/riba, which is the most significance principle of Islamic banking. Chapter six explains some of the financial issues related to Islamic banking.

scholarly journals Government Anticipation in Tackling Crime of Money Laundering (White Collar Crime) in Indonesia

2018 ◽  
Vol 3 (1) ◽  
pp. 145-163
Author(s):  
Sunarno Edy Wibowo
Keyword(s):  
Money Laundering ◽  
Financial Institutions ◽  
Financial Services ◽  
White Collar Crime ◽  
Banking System ◽  
The State ◽  
Clearing System ◽  
The Government ◽  
The Stability ◽  
Almost All

Indonesia is currently racing with time related to the increasingly rampant criminal corruption committed by state officials who have a very significant impact also on the increase of TPPU. One of the perpetrators' efforts to avoid him from the law by hiding or obscuring his crime through money laundering takes advantage of the mechanism of financial traffic. Money laundering practices are very often committed against money earned from crime. The practice is simply a way to disguise or conceal the proceeds of a criminal offense. Money laundering is then used as a shield for the proceeds of the crime. Therefore, the existence of provisions or regulations on TPPU is very beneficial to minimize the velocity of funds from the crime. The latent danger of corruption has touched almost all levels of society, not only in relation to state organizers, power and policy, but also to the presence of private parties. Various methods have been taken to eradicate it, both preventively and repressively as well as by making changes to the method of eradication. One of the objectives of repressive action is to restore the State's losses. Corruption has resulted in heavy losses to the state's finances and undermines the stability of the national economy. The state losses in the form of assets resulting from corruption in returning it are not easy, the complexity of the settlement of criminal cases is one of the most dominant causes, not to mention the settlement of cases of corruption, especially those that have obtained permanent legal force, in relation to the spoils and payments replacement money, suspects, defendants, or convicted persons who disappeared at the time the proceedings were underway. The handling of TPPU cases has significance for the return of state assets related to the eradication of corruption. Property becomes a very fundamental object in relation to corruption and TPPU. Money laundering is always associated with property derived from a crime. The outcome of corruption is certainly related to assets or property acquired in an unauthorized and dirty manner. The prosecution of the perpetrators of corruption is not only related to the problem of his actions but also the repression of the result of his act of seizure of assets or assets of the perpetrator. Presidential Instruction Number 5 of 2004 on the Acceleration of Corruption Eradication issued by the President on December 9, 2004 to prove the seriousness of the government in criminalizing the money laundering of corruption results as well as a legal instrument that ordered law enforcement officers to immediately restore the state loss (asset recovery).1 The handling of TPPU, is a tough task for PPATK, especially to detect the occurrence of TPPU and further criminal acts. So the prevention and eradication of money laundering requires a systematic and comprehensive mechanism, which includes the detection process and legal process.2 The practice of money laundering through bank mechanisms is possible because banks are the most vulnerable financial institutions, and are subjected to the practice of Money Laundering whereby banks have a clearing system, international correspondence and a secret banking system.3 The role of the financial and government industry (PPATK) in preventing and eradicating TPPU becomes a barometer. It is based on banking and other financial services providers as front lines, in anti money laundering regimes. It is expected that financial institutions together with employees are at the forefront, in an effort to combat illegal financial activities.4

Capital Markets and Financial Entrepreneurs in the Roman World

2020 ◽  
pp. 381-416 ◽  
Author(s):  
Koenraad Verboven
Keyword(s):  
Middle Ages ◽  
Financial Institutions ◽  
Financial Services ◽  
Credit Markets ◽  
Banking System ◽  
Financial Capital ◽  
Lender Of Last Resort ◽  
Financial Transfers ◽  
Roman World ◽  
Modern Capitalism

Modern capitalism requires institutions that provide financial capital to entrepreneurs. The need for financial capital has been inherent in capitalism since the middle ages and was equally strong for ancient commercial enterprises. The financial institutions and instruments developed in early modern Europe, however, did not exist in the Roman world. This chapter argues that we need to analyse Roman financial institutions for what they were and relate them to the levels of commerce and production they made possible. The focus is on commercial intermediaries (deposit bankers and others) who offered financial services bridging the gap between those who had money and those who needed it. Roman credit markets relied on open-access institutions. In the heartlands and hubs of the empire credit markets were thick and capital flowed easily from investors, through intermediaries, to entrepreneurs and back. But this was not true everywhere, and throughout its history, even in the areas where credit markets were thick, social networks were essential for financial transfers to be possible. Anonymous transactions through an impersonal financial market remained a marginal phenomenon because the negotiability of financial instruments did not support the development of such a market. In the absence of a central banking system with a structural lender of last resort and an interlocking network of banks, the money supply remained largely limited to the stock of metal currency. The Roman financial system was sophisticated and efficiently fulfilled the needs of estate owners, farmers, craftsmen, shippers, merchants, and retailers, but never realized a financial revolution comparable to that which gave birth to the modern banking system.

Abnormal lending and risk in Swedish financial institutions

2018 ◽  
Vol 17 (4) ◽  
pp. 498-513
Author(s):  
Stephanos Papadamou ◽  
Dionisis Philippas ◽  
Batnini Firas ◽  
Thomas Ntitoras
Keyword(s):  
Financial Institutions ◽  
Financial Institution ◽  
Z Score ◽  
Content Type ◽  
Interest Income ◽  
Wide Range ◽  
Different Types ◽  
Loan Growth ◽  
Loan Losses ◽  
Credit Institutions

Purpose This paper aims to examine the relationship between abnormal loan growth and risk in Swedish financial institutions by type and borrower using three indicators as proxies for risks related to loan losses, the ratio of interest income to total loans and solvency perspectives. Design/methodology/approach Using a large sample of different types of Swedish financial institutions, this paper uses a panel framework to examine the relationships between abnormal loan growth rates and loan losses, interest income as a percentage of total loans, changes in the equity to assets ratio and changes in z-score. Findings The findings show two important points of evidence. First, abnormal lending to retail customers increases loan losses and interest income in relation to total loans. Second, abnormal lending to other credit institutions decreases loan losses and significantly changes the capital structure by increasing the reliance on debt funding and significantly improves the z-score measure. Research limitations/implications The findings provide useful implications for the management of loan portfolios for a wide range of Swedish financial institutions, identifying two components: abnormal lending to households may increase loan losses and increase interest income in relation to total loans, and excessive lending to other credit institutions may reduce solvency risk and allow more debt financing for the financial institution. Originality/value This is the first study to use a panel framework in analyzing the behavior of different types of Swedish financial institutions in relation to loans granted to retail customers and other credit institutions.

scholarly journals FORMATION OF UKRAINE TRANSPARENCY BANKING

2019 ◽  
pp. 35-41
Author(s):  
T. Savchenko ◽  
L. Mynenko
Keyword(s):  
Development Strategy ◽  
Financial Market ◽  
Financial Institutions ◽  
Financial Services ◽  
Banking Sector ◽  
Banking System ◽  
Market Participants ◽  
Financial Organization ◽  
Credit Bureaus ◽  
National Bank

The article analyzes requirements of the National Bank of Ukraine for transparency of banks, banking groups and non-banking financial market participants. Transparency development process in the Ukrainian banking sector considered in a dynamic and in context of the EU's transparency requirements. Authors came to conclusion that the National Bank of Ukraine have to extended last achievements at banks transparency issues on activities of banking groups and to non-banking financial institutions. This conclusion based on rudiments of effective supervision of banking groups on a consolidated basis, as well as the adoption by the Verkhovna Rada of Ukraine of the Law on "Split". This law extends the National Bank's responsibility in the supervision of non-banking financial institutions (insurance, leasing, financial companies, credit unions, pawnshops and credit bureaus) since July 2020. Therefore, the National Bank should introduce new regulatory requirements to increase the transparency of banking groups and non-bank financial intermediaries. These reforms will establish uniform approaches and standards for disclosure of information on the activities of financial institutions, as well as provide the harmonization of national legislation with EU requirements. Expanding the list of public reporting information and establishing proper reporting intervals will ensure the stable functioning of the financial market and will increase the confidence in the financial system by the users of financial services. These measures will also help management of the financial organization to make informed decisions in defining their development strategy. Besides, they will provide further development of the competitive environment in the financial services industry. Keywords: transparency of banking system, transparency requirements, bank, banking group.

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