The move to sustainable development and building a carbon-low economy needs funding. In this regard, a new direction in finance – green (sustainable) finance – has emerged. One of the green finance instruments is green bonds, first issued by supranational financial institutions. This paper aims to identify the features of green bond issues and implemented green projects by the World Bank (the WB) and the European Bank for Reconstruction and Development (the EBRD). Data were obtained from databases and reports of the WB, the EBRD, and the Climate Bonds Initiative. Data analysis was provided using statistical methods, particularly descriptive and comparative statistics. A positive trend in the issue of green bonds in the volumes and timing of the WB and the EBRD was revealed, despite the shift in emphasis caused by COVID-19. Renewable energy, energy efficiency, and clean transportation remain the primary directions of the WB, and the EBRD green projects amounted to more than 60% of total projects funding. The geography of green projects financed through the WB and the EBRD green bonds indicates that green projects are receiving significant funding from countries facing environmental challenges and demonstrating intent to green transition (the WB – China and India, the EBRD – Turkey, Poland, and Egypt). Supranational financial institutions were the first to come to the forefront of sustainable development funding and are now spearheading the creation of new financial instruments aimed at financing both green and social projects, leading to the emergence of sustainability bonds. Acknowledgment(s)The authors would like to thank the participants of the 1st International Conference on Sustainable Development (SDL 2021) for providing the valuable remarks and a fruitful discussion. This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.
The purpose of the article is to determine the link between investing in human capital and the formation of the creative economy. Given that human capital is considered both a factor in the socio‑economic development of countries and a prerequisite for the formation of the creative economy and consequently, for the modernization changes in today’s economy, there is a need to study the areas of investment in human capital. The study is based on an analysis of a number of indicators in Eastern Europe (Ukraine and Moldova) and Central Europe (Poland, the Czech Republic, Romania, Hungary, and Lithuania): total expenditure on education, the analysis of which made it possible to determine the level of education funding in each country; the average cost per pupil/student, which allowed us to identify trends in spending by funding organizations; the share of total expenditure on education in GDP, depending on the level of education, which made it possible to determine the priority and sufficiency of education system funding; the cost allocation indicator by funding organizations; and the human development index, which measures living standards, literacy, education, and longevity. The study also focuses on analyzing data that determine the global innovation index, since its calculation is based on the assessment indicators of human capital and research (education, tertiary education, research, and development) and creative outputs (intangible assets, creative goods, and services, online creativity). Based on the results of the research, it was concluded that human capital is the main factor that boosts the creative economy, and enhancing human capital depends on the level of education and scientific progress in a country. Empirical evidence shows that directing investment in human capital contributes to the formation of the creative economy, improving the competitiveness of countries, and at the same time, ensuring the appropriate rates of their socio‑economic development.
The paper revisits the causes and consequences of financial dollarization in Ukraine during the past decade (monthly data). Dollarization in emerging markets plays a dual role: positive and negative. This study of financial dollarization is in the context of resident household holdings of foreign currency-denominated bank deposits and loans. If exchange rates are stable, deposit dollarization allows the withdrawal of money from the shadow economy, and loan dollarization allows the lending of long-term money, which is not possible with domestic currency due to inflation expectations. At the same time, the instability and lack of supply of foreign currencies in the market result in the collapse of household and bank finances, leading to currency risk, credit risk, and liquidity risk. Therefore, the study uses estimate indicators, the deposit dollarization index (DDI), household foreign currency deposits and loans, loan to deposit ratio (LTD), and inflation to find out the tendencies in the context of a changing domestic currency exchange rate. We present three models to reveal the influence of financial dollarization on banking stability. The first one explains the real value of domestic currency deposits through indicators such as M2 (positive), exchange rate (negative), domestic currency deposits (positive), and panic effects (negative). The second one describes the influence of the exchange rate (negative) and panic effects (negative) on foreign currency deposits. The third one explains the DDI through such the exchange rate, M2, and interest rates. The combined models provide an insight about the time necessary to stabilize the Ukrainian banking system.
Dollarization of bank assets and liabilities is a typical phenomenon with multi-faceted effects. Primarily, this phenomenon raises risks of imbalance in assets and liabilities following a sharp local currency devaluation. However, dollarization may deliver additional returns. This calls for development and implementation of strategies for dollarization risk management. This study aims at designing risk management strategies for ensuring optimal currency structure of loan and deposit portfolio under an extremely high level of devaluation risk in six post-Soviet countries. The study is based on risk modeling methods and asset liability management techniques. The value-at-risk methodology is applied to measure and identify main risks banks face under dollarization. Two types of risk are identified: the strategic risk measured as a ratio of deposits in foreign currency; and the tactical risk measured as a ratio of foreign currency deposits transformed into local currency loans. Suggested effective risk management strategies are based on the optimization of these two types of risks. The first strategy deals with deposit dedollarization and non-transformation of foreign currency deposits into local currency loans. Under the second strategy, increased deposit dollarization is complemented with non-transformation of foreign currency deposits into local currency loans. The third strategy involves deposit de-dollarization and conducting transformation of foreign currency deposits into local currency loans. Each strategy entails maximization of return with subsequent minimization of risk. The study concludes that the first strategy is appropriate for Ukraine and Belarus, the second one suits Azerbaijan and Moldova, and the third one fits Armenia and Georgia. JEL classification:F31, G01, G21.
Глобальна фінансова криза засвідчила необхідність не лише реформування та вдосконалення банківського сектору України, а й розуміння потреби зниження системних ризиків – ризиків виникнення збоїв у наданні фінансових послуг, які мають глобальні негативні наслідки для всієї економіки. Повністю усунути системні ризики неможливо, але можна не допустити їх накопичення та зменшити вплив. Метою макропруденційної політики є забезпечення фінансової стабільності. У підтриманні фінансової стабільності особлива увага звертається на діяльність системно важливих банків (далі – СВБ), тому що вони акумулюють значні кошти населення та вони складають ядро банківського бізнесу в Україні. Банкрутство системно важливого банку може зумовити зараження інших банків та фінансових установ, що в свою чергу матиме наслідком дестабілізацію фінансового ринку та зростання ймовірності появи кризи [2, 3].
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