Research background: Increased regulations reducing systemic risk are essentially underpinned by the understanding of the global nature and sources of instability of the financial system. In the economic literature, there are many arguments presented by critical supporters and opponents of measuring and reporting global systemically important entities. Purpose of the article: In response to the requirements of regulators, the article seeks to identify systematically important regulated stock markets for selected global stock exchanges by developing a composite ratio. Additionally, it provides empirical evidence concerning their risk exploration. Methods: The proposed method uses weighted average values of indicators grouped in four categories: (1) market size, (2) cross-jurisdictional activity and interconnectedness, (3) substitutability, (4) complexity. The research covers stock exchanges, reported to WFE, spanning the period 2008–2017. Findings & Value added: The study finds that the problem of systemic risk on global stock exchanges is growing despite numerous prudential regulations. In order to obtain a more complete assessment of market systemic sensitivity, regulators should take into account a wider range of indicators and calculations such as cross-jurisdictional activity and market complexity.
The purpose of the article is to identify models of banks' activity in the securities and derivatives markets, as well as to analyse changes in these models on the example of the largest banks in the EU. Design/Methodology/Approach: The proposed method uses cluster analysis of the main indicators for banking investment based on the agglomerative hierarchical clustering algorithm of Ward and the Tau Index as the criterion for evaluating the optimal number of clusters. The research covers 29 largest EU banks, spanning the period 2007-2018. Findings: Before the global financial crisis it was possible to clearly identify two clusters, one of which reflected the high engagement of a number of banks in the securities and derivatives market, then after the Great Recession, can be distinguished four main models:(1) a highly active investment strategy in the securities and derivatives markets; (2) an active investment strategy in the securities market; (3) active mix-investment strategy in the securities and derivatives markets; (4) moderate investment strategy in the securities and derivatives markets. Practical implications:The data analysis shows that significant modifications in the investment strategies of banks confirm to some extent the effectiveness and the further need of certain additional regulations to ensure the financial soundness of banking institutions at the EU level, as well as the effectiveness and the further need of the changes in the national legislation of individual EU countries concerning the banking proprietary trading in the securities and derivatives markets. Originality/Value: The paper has enabled to develop an understanding of the modification of the business models of largest EU banks in the financial instruments market.
In response to the last financial crisis new institutional reforms were implemented. The aim for these reforms is to save and secure the functioning of markets in financial instruments. It seems though that these efforts lack the clarity of the basic notion, which is the term "institution". This weakness my cause interpretational problems on both theoretical and practical level. The aim of this article is to clarify the understanding of the notion of "institution" in finance. One of ways to achieve this goal is to present the institutional structure of the market in financial instruments, to specify the characteristics of both individual institutions and the whole environment in which they act. And, lastly, to outline an institutional transformation process which is driven by innovations. The classification of institutions is also proposed. As a result of analysis, following types of institutions are singled out: institutions in a broad meaning (established through institutional contracts), institutions in a narrow sense (norms and social rules). Additionally, the formal and informal institutions are distinguished.
The aim of the research is to define possible contagion level of capital market resulting from shocks in main international stocks and bonds markets on basis of the assessment of market interconnectedness. Global Vector Autoregressive model was built up for securities markets in China, Euro area, Japan and the U.S. Using generalised impulse response functions scenarios of influence of shocks in market and estimate of contagion level in selected time horizon are simulated.
Research relevance. Studies of the causes and mechanism of hazardous production situations origin and development at coal mining enterprises have shown that their development is most often due to organizational factors, and the prerequisites for their occurrence are associated, to a greater extent, with process flow factors of mining operations, including design decisions. For this reason, it became necessary to establish specific process flow factors that are prerequisites for the emergence of hazardous production situations at a coal pit. Research objective is to establish the factors of hazardous production situations occurrence; to identify and justify indicators of hazardous production situations origin, obtained based on an assessment of the general state of mining, to take into account appropriate scenarios for preventing or avoiding the hazardous production situations in the course of development; to diagnose early signs of their occurrence and eliminate the causes of their development. Methods of research. The state of mining in the coal pit and operations on production safety were assessed from the perspective of hazardous production situations origin and development and was carried out during the process audit. Indicators of the state of the deep pit working area were formed based on the analysis of data from geographic information monitoring of mining, safety rules, as well as process flow diagrams of mining operations. Results. Based on the results of the process audit of the state of mining operations, the factors that are prerequisites for the development of hazardous production situations are determined. They became the basis for the selection of process flow and organizational indicators of hazardous production situations occurrence. The conditions for hazardous production situations occurrence are defined, depending on the presence of objective natural, process flow and organizational factors affecting the safety of work. Conclusions. Open-pit coal mining is naturally accompanied by the emergence and development of hazardous production situations. It is proposed to monitor the prerequisites of hazardous production situations by process flow and organizational indicators in order to make adequate management decisions to prevent the occurrence of hazardous incidents.
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