Role of Negative Interest Rates for Energy Assets Pricing in Financial Markets

2021 ◽  
pp. 107-119
Author(s):  
Ismail Ismailov ◽  
Tomonobu Senjyu
Keyword(s):  
Financial Markets ◽  
Interest Rates ◽  
World Economy ◽  
Foreign Currency ◽  
Banking System ◽  
Negative Interest Rates ◽  
The World ◽  
Energy Assets ◽  
National Banking System

The world economy strives for globalization, and most energy assets are connected with each other through correspondent banks and other mutual operations. The relevance of the topic of the thesis is due to the fact that in September 2019 a number of proposals were made to introduce the practice of negative interest rates in the national banking system due to the fact that Russian energy assets are not profitable to place in foreign currency..

scholarly journals THE ROLE OF DERIVATIVE INSTRUMENTS IN FINANCIAL STABILITY

2019 ◽  
Vol 4 (8) ◽  
pp. 130-135
Author(s):  
Lela Scholer-Iordanashvili
Keyword(s):  
Interest Rates ◽  
Financial Stability ◽  
World Economy ◽  
Foreign Currency ◽  
Financial System ◽  
Recent Decade ◽  
Negative Influence ◽  
The World ◽  
Correlation Rate

Globalization offers new challenges to the world economy, which becomes more depended on unprecedented in- crease of financial activity worldwide. Availability of information and development of technologies significantly increased capital flow in the world and role of capital and monetary markets in economy. Second half of 2007 and first half of 2008 faced import- ant events in the world economy. Among them especially no- table are US real estate crisis and global limitation of credits, devaluation of USD and strengthening of inflation processes. These global events have significant influence over financial stability. In the recent decade variability of stocks and interest rates, together with globalization of capital markets, in- creased demand on financial instruments with the purpose of distribution of risks. From this perspective, interest rate derivatives are most frequently marketed among OCT derivatives. Therefore, estimation of the role of financial derivatives instruments is very important in stability of international financial system. Purpose of research is to analyze influence of derivatives over financial crisis. Within frameworks of re- search 5 countries are studied for 1997-2010 quarterly. OLS regressive equation is used in research for empirical tests. Model includes following variables: crisis index (dependent variable), independent variables are: correlation rate of cur- rent account and GDP, correlation rate of domestic credit on private sector with GDP, correlation rate between foreign currency reserves and conditional amounts of market derivatives on the stock exchange. Empirical analysis shows us that influence of derivatives over financial stability is not unilateral and depends on characteristics of financial system of the country. Particularly, in Singapore and USA, where financial system is strong, influence of derivatives is positively reflected on financial stability, and empirical study conduct- ed on example of emerging markets, particularly, Argentina, Russia and Brazil revealed negative influence of derivatives on financial system.

scholarly journals Reforming LIBOR and Other Financial Market Benchmarks

2015 ◽  
Vol 29 (2) ◽  
pp. 191-212 ◽  
Author(s):  
Darrell Duffie ◽  
Jeremy C. Stein
Keyword(s):  
Financial Markets ◽  
Interest Rates ◽  
Banking System ◽  
Economic Role ◽  
News Reports ◽  
Legal Risks ◽  
The Difference ◽  
The Interest Rate ◽  
Orderly Transition

LIBOR is the London Interbank Offered Rate: a measure of the interest rate at which large banks can borrow from one another on an unsecured basis. LIBOR is often used as a benchmark rate— meaning that the interest rates that consumers and businesses pay on trillions of dollars in loans adjust up and down contractually based on movements in LIBOR. Investors also rely on the difference between LIBOR and various risk-free interest rates as a gauge of stress in the banking system. Benchmarks such as LIBOR therefore play a central role in modern financial markets. Thus, news reports in 2008 revealing widespread manipulation of LIBOR threatened the integrity of this benchmark and lowered trust in financial markets. We begin with a discussion of the economic role of benchmarks in reducing market frictions. We explain how manipulation occurs in practice, and illustrate how benchmark definitions and fixing methods can mitigate manipulation. We then turn to an overall policy approach for reducing the susceptibility of LIBOR to manipulation before focusing on the practical problem of how to make an orderly transition to alternative reference rates without raising undue legal risks.

On the mechanisms of growth of the Russian economy under conditions of worsening financial problems in the world

2016 ◽  
pp. 5-25 ◽  
Author(s):  
M. Ershov
Keyword(s):  
Economic Growth ◽  
Interest Rates ◽  
Stock Markets ◽  
World Economy ◽  
Financial Resources ◽  
Russian Economy ◽  
Negative Interest Rates ◽  
The World ◽  
International Banks ◽  
Government Interference

Many challenges that have recently emerged in the world economy still exist. Moreover, new problems have appeared. Now we can see at the same time low economic growth in many countries, rising public debts, overheating of stock markets. The fact that alongside with negative interest rates financial resources are not in demand becomes more obvious. Major international banks meet rising problems again. In this environment government interference to support economic players and different markets is getting more pervasive.

The World Economy: Forecast Summary

2016 ◽  
Vol 237 ◽  
pp. F2-F2
Keyword(s):  
Interest Rates ◽  
Federal Reserve ◽  
Financial Services ◽  
European Central Bank ◽  
World Economy ◽  
Banking System ◽  
List Type ◽  
European Central ◽  
The World ◽  
Single Rulebook

The world economy is expected to grow by 3.0 per cent in 2016, an unchanged forecast from the May Review. However, world growth in 2017 is revised down to 3.3 per cent from 3.5 per cent.A number of financial sector risks remain. Many large Euro Area banks are fragile, with the banking system in Italy particularly weak. This is likely to test the viability of the Single Rulebook covering financial services.Inflation is likely to be below target in the OECD economies in 2017. The European Central Bank (ECB) stands ready to ease monetary conditions while the Federal Reserve is likely to raise interest rates very gradually.

scholarly journals Geld verändert die Welt

2018 ◽  
Vol 87 (3) ◽  
pp. 65-81
Author(s):  
Reinhold Rickes
Keyword(s):  
Monetary Policy ◽  
Financial Markets ◽  
Interest Rates ◽  
Financial Intermediation ◽  
Savings Banks ◽  
The World ◽  
Low Interest Rates

Zusammenfassung: In Zeiten von Digitalisierung, Niedrigzinsen und Kryptogeld stehen viele ökonomische Prozesse und insbesondere die Finanzintermediation auf dem Prüfstand. Im vorliegenden Beitrag wird dabei die Rolle der Geldpolitik kritisch mit Blick auf ihre „Ultraexpansivität“ reflektiert und Spekulationsgefahren sowie Risiken der Veränderungen des Geldsystems analysiert. Im Finanzsektor ist entscheidend, wie zukünftige Regulierungen ausgestaltet werden. Summary: Money is changing the world. In times of digitization, low interest rates and cryptocurrency, many economic processes and especially financial intermediation are under scrutiny. In this article, the role of monetary policy is critically reflected with regard to its „ultra-expansionism“ and the necessity of further exit steps is discussed. In addition, the financial markets are being changed by the development of cryptocurrency. As a result, the associated risk of speculation poses a threat. In this context, it is also necessary to warn against the path towards a full-money system. After all, banks and savings banks are facing up to these challenges and mastering them. Therefore, it remains crucial to design further regulations with moderation and balance.

scholarly journals AREAS OF USING INTERNATIONAL EXPERIENCE FOR THE DEVELOPMENT OF SECURITIZATION OF MORTGAGE LOANS IN RUSSIA

2020 ◽  
Vol 1 (5(74)) ◽  
pp. 15-20
Author(s):  
I.V. Belova
Keyword(s):  
Best Practices ◽  
Financial Markets ◽  
World Economy ◽  
Banking Sector ◽  
Banking System ◽  
Mortgage Loans ◽  
Developed Economies ◽  
The World ◽  
Mortgage Securities ◽  
Over 40 Years

The article is devoted to considering the current level of securitization of mortgage assets in Russia and the role that it can play in developing and strengthening the national financial system. The world experience shows that the issue of mortgage securities is a profitable source of financing for credit organizations and stimulates the developmentof the banking sector as a whole. Being one of the most effective economic innovations, the process of securitization of mortgage assets for over 40 years of use in the most developed economies of the world confirms its relevance and importance.Based on the analysis of international best practices in this area, those possible ways of developing securitization of mortgage assets in Russia were identified that would allow our country to maintain the liquidity of the Russian banking system in conditions of growing crisis processes in the world economy and financial markets and give it the necessary sustainability through reliable financial sources.

scholarly journals Financial market imbalance: reasons and peculiarities of occurrence in Ukraine

2017 ◽  
Vol 14 (1) ◽  
pp. 227-235 ◽  
Author(s):  
Rostyslav Slav’yuk ◽  
Lyudmyla Shkvarchuk ◽  
Iryna Kondrat
Keyword(s):  
High Risk ◽  
Financial Markets ◽  
Financial Market ◽  
Financial Services ◽  
Banking System ◽  
Insurance Companies ◽  
Ease Of Access ◽  
Investment Process ◽  
National Banking System

Financial imbalance is the reason of a macroeconomic instability. This study aims at identifying the institutional causes of financial markets imbalance. The authors consider that financial intermediaries in Ukraine work in a speculative market segment carrying out high-risk transactions with the purpose of earning a huge profit. In fact, in Ukraine the role of these institutions in the investment process financing is insignificant. The authors show that soundness of banks along with the ease of access to loans and a low level of confidence in national banking system are the main reasons of instability in financial market in Ukraine. Due to scarcity of financial capacity and refusal to carry out transactions in a high-risk market segments, insurance companies are unable to entirely perform functions of risk redistribution. Competitiveness of Ukrainian financial market remains low with a limited financial services nomenclature and it may be considered to be attractive for potential foreign investors.

The world economy

1998 ◽  
Vol 166 ◽  
pp. 3-3
Keyword(s):  
Financial Markets ◽  
Interest Rates ◽  
World Economy ◽  
High Probability ◽  
Substantial Reduction ◽  
List Type ◽  
The Us ◽  
The World

•The most likely outlook for the world economy in 1999 is a marked slowdown, with growth slackening in the OECD from 2.4 to 1.8 per cent.•But there is also a high probability that further shocks to financial markets could induce a full blown recession in the US and a substantial reduction in European growth.•Sharp and swift cuts in interest rates are needed to avert this danger.•The ECB could cut rates by half a percentage point without compromising its inflation goals.

On Energy Status indicators and the role of renewableEnergy under Economic Crisis

2014 ◽  
pp. 92-105
Author(s):  
P. Bezrukikh ◽  
P. Bezrukikh (Jr.)
Keyword(s):  
Renewable Energy ◽  
World Economy ◽  
Electrical Energy ◽  
Primary Energy ◽  
Primary Energy Consumption ◽  
Energy Status ◽  
Economy Growth ◽  
The World ◽  
Production Regime

The article analyzes the dynamics of consumption of primary energy and production of electrical energy in the world for 1973-2012 and the volume of renewable energy. It is shown that in the crisis year of 20 0 9 there was a significant reduction in primary energy consumption and production of electrical energy. At the same time, renewable energy has developed rapidly, well above the rate of the world economy growth. The development of renewable energy is one of the most effective ways out of the crisis, taking into account its production regime, energy, environmental, social and economic efficiency. The forecast for the development of renewable energy for the period up to 2020, compiled by the IEA, is analyzed. It is shown that its assessment rates are conservative; the authors justify higher rates of development of renewable energy.

The Role of Technological Change in the Long-run Global Economy Forecasting

2013 ◽  
pp. 97-116 ◽  
Author(s):  
A. Apokin
Keyword(s):  
Technological Change ◽  
Data Quality ◽  
Long Range ◽  
Global Economy ◽  
World Economy ◽  
Qualitative Approaches ◽  
Long Run ◽  
The World ◽  
National Economies

The author compares several quantitative and qualitative approaches to forecasting to find appropriate methods to incorporate technological change in long-range forecasts of the world economy. A?number of long-run forecasts (with horizons over 10 years) for the world economy and national economies is reviewed to outline advantages and drawbacks for different ways to account for technological change. Various approaches based on their sensitivity to data quality and robustness to model misspecifications are compared and recommendations are offered on the choice of appropriate technique in long-run forecasts of the world economy in the presence of technological change.

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