Trust cycle of the finance sector and its determinants: The case of Ukraine

Abstract

The paper presents the results of exploring the characteristics of trust cycle in the financial sector of the economy in general and across its main components (trust in banking and non-bank financial and credit systems) illustrated by the economy in transition-Ukraine-for the period 1st quarter 2009-1st quarter 2018. Determinants of nonlinear dynamics of public trust in the financial sector of the economy were also identified. For this purpose, an algorithm has been developed that enables studying the cyclical nature of public trust in the financial sector and testing the hypotheses about the determinants of its nonlinear dynamics. To highlight the cyclical component of the time series, harmonic analysis via Fourier transformations was used. In order to analyze public trust in the financial sector and its main components the following indicators were used: absolute volatility, relative volatility (in relation to financial and business cycles), the persistence of actual values and cyclic components, correlation with financial and business cycles. Our main

Trust crisis in the financial sector and macroeconomic stability: a structural equation modelling approach

“…Accordingly, a sharp decline in the confidence/sentiment indexes is seen as a trust crisis/collapse of trust/distrust. Other areas of research have been aimed at studying financial behavior (Shkvarchuk & Slav'yuk, 2019) and trust and cycles in the financial system (Brychko et al, 2019;Gazda, 2008) based on particularities of consumer's consumption and investment. However, there are certain drawbacks associated with the use of questionnaires or indices derived from them.…”

Environmental taxes in ensuring national security: A structural optimization model

“…Thus, the achieved high level of macroeconomic stability creates reserves for the progressive transformation of the national economy in the direction of more environmentally responsible, eliminating threats to economic and energy security (Bilan et al, 2020;Fomina & Vynnychenko, 2017;Lyulyov et al, 2015;Melnyk et al, 2018). At the same time, the development of the financial sector creates favorable conditions for responsible investment in energy development and production restructuring using environmentally friendly technologies (Brychko et al, 2019;Lyeonov & Liuta, 2016).…”

Illegal activities of financial intermediaries: A burden of trust crisis

“…Based on a dynamic general equilibrium framework that is widely adopted in financial intermediaries' investigations, they had explored the pathway whereby confidence influence shadow banking. Over the past several years, there has been more attention in a large volume of published studies to be paid on the role of human capital (Bryl, 2020, Railaite & Čiutienė, 2020, financial literacy (Gavurova et al, 2019, Dewi et al, 2020, economic agents` decisions under uncertainty (Civljak, 2019, Silva et al, 2019, customers' loyalty (Esmaeili et al, 2021), trust (Nor Zaini et al, 2017, Oláh et al, 2017, Brychko et al, 2019, Oláh et al, 2019, Bappayo et al, 2019, Çera et al, 2019, Ryciuk & Nazarko, 2020. However, the pressure of the trust crisis in the financial sector on involvement of financial intermediaries in illegal activities was surprisingly neglected by modern research.…”