IDEAS home Printed from https://ideas.repec.org/a/bas/econst/y2021i3p39-55.html
   My bibliography  Save this article

Ukrainian Financial System Development: The Path to EU

Author

Listed:
  • Kateryna Anufriieva
  • Svitlana Brus
  • Yevhen Bublyk
  • Yuliia Shapoval

Abstract

The paper is based on the comparative analysis of the main characteristics and features of the financial system of Ukraine and Bulgaria, and discusses the issues and prospects of building a modern institutional environment to meet the requirements for European integration, to support economic development and to prevent crisis shocks. The study includes an analysis of the characteristics of financial liberalisation, the dynamics of international investment flows, the requirements of the budget process, in particular the formation of the structure of domestic and foreign debt, the peculiarities of monetary and exchange rate policy.The article determines the characteristic feature of small open economies, that is, the limited development of the institutional environment of the country’s financial sector and a dominant banking sector. The article emphasises that in such terms, the public policy is focused on the development of the banking sector with a gradual increase in its internationalisation. A natural consequence is the large share of state and foreign capital in the financial sector of the economies in transition with the limited development of non-banking and stock market segments. Another feature is the reliance of financial stability on the external financing and inflow of foreign currency, including in the form of external and internal government borrowing and international private transfers.The mentioned peculiarities of the development of the financial systems of Ukraine and Bulgaria show that the institutional weakness of the financial system is due not only to the negative consequences of several financial and economic crises but also to errors in financial system reform policy. Attempts to build the financial system based on accelerated financial liberalisation, focusing on the banking sector separation of the latter from the real sector of the economy, laid the ground for the institutional weakness of the financial system. The authors stress that the elimination of these fundamental imbalances, supported by modernised approaches to monetary and macroprudential regulation, should strengthen the institutional capacity of Ukraine’s financial system, bringing it closer to the requirements of the EU integration.

Suggested Citation

  • Kateryna Anufriieva & Svitlana Brus & Yevhen Bublyk & Yuliia Shapoval, 2021. "Ukrainian Financial System Development: The Path to EU," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 39-55.
    • Handle: RePEc:bas:econst:y:2021:i:3:p:39-55
    as

    Download full text from publisher

    File URL: https://www.iki.bas.bg/Journals/EconomicStudies/2021/2021-3/3_Anufriieva.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Enrique G. Mendoza & Marco E. Terrones, 2008. "An Anatomy Of Credit Booms: Evidence From Macro Aggregates And Micro Data," NBER Working Papers 14049, National Bureau of Economic Research, Inc.
    2. Gilles Mourre & Adriana Reut, 2019. "Non-tax revenue in the European Union: A source of fiscal risk?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 26(1), pages 198-223, February.
    3. Matthieu Bussière & Marcel Fratzscher, 2008. "Financial Openness and Growth: Short‐run Gain, Long‐run Pain?," Review of International Economics, Wiley Blackwell, vol. 16(1), pages 69-95, February.
    4. Lane, Philip R. & Milesi-Ferretti, Gian Maria, 2007. "The external wealth of nations mark II: Revised and extended estimates of foreign assets and liabilities, 1970-2004," Journal of International Economics, Elsevier, vol. 73(2), pages 223-250, November.
    5. Ye. Bublyk, 2018. "Structural-functional deformation of the financial sector in the Ukrainian economy," Economy and Forecasting, Valeriy Heyets, issue 2, pages 48-61.
    6. Garabed Minassian, 2013. "Bulgarian banking: looking for sustainability," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 7(3), September.
    7. Lane, Philip & Milesi-Ferretti, Gian Maria, "undated". "External Wealth of Nations," Instructional Stata datasets for econometrics extwealth, Boston College Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bruce N. Lehmann & David M. Modest, 1985. "The Empirical Foundations of the Arbitrage Pricing Theory I: The Empirical Tests," NBER Working Papers 1725, National Bureau of Economic Research, Inc.
    2. Pasricha, Gurnain Kaur & Falagiarda, Matteo & Bijsterbosch, Martin & Aizenman, Joshua, 2018. "Domestic and multilateral effects of capital controls in emerging markets," Journal of International Economics, Elsevier, vol. 115(C), pages 48-58.
    3. Kose, M. Ayhan & Prasad, Eswar & Rogoff, Kenneth & Wei, Shang-Jin, 2010. "Financial Globalization and Economic Policies," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4283-4359, Elsevier.
    4. Chen, Jinzhao & Quang, Thérèse, 2014. "The impact of international financial integration on economic growth: New evidence on threshold effects," Economic Modelling, Elsevier, vol. 42(C), pages 475-489.
    5. Mahvash S. Qureshi & Jonathan D. Ostry & Atish R. Ghosh & Marcos Chamon, 2011. "Managing Capital Inflows: The Role of Capital Controls and Prudential Policies," NBER Working Papers 17363, National Bureau of Economic Research, Inc.
    6. Bianchi, Benedetta, 2018. "Structural credit ratios," ESRB Working Paper Series 85, European Systemic Risk Board.
    7. Rudiger Ahrend & Antoine Goujard, 2012. "International Capital Mobility and Financial Fragility - Part 3. How Do Structural Policies Affect Financial Crisis Risk?: Evidence from Past Crises Across OECD and Emerging Economies," OECD Economics Department Working Papers 966, OECD Publishing.
    8. Julián A. Caballero, 2016. "Do Surges in International Capital Inflows Influence the Likelihood of Banking Crises?," Economic Journal, Royal Economic Society, vol. 126(591), pages 281-316, March.
    9. Guillermo A. Calvo, 2013. "The Mayekawa Lecture: Puzzling over the Anatomy of Crises- Liquidity and the Veil of Finance," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 31, pages 39-64, November.
    10. Serdar Kabaca, 2011. "Labor Share Fluctuations in Emerging Markets: The Role of the Cost of Borrowing," Koç University-TUSIAD Economic Research Forum Working Papers 1122, Koc University-TUSIAD Economic Research Forum.
    11. Calderón, César & Kubota, Megumi, 2013. "Sudden stops: Are global and local investors alike?," Journal of International Economics, Elsevier, vol. 89(1), pages 122-142.
    12. Ligonniere, Samuel, 2018. "Trilemma, dilemma and global players," Journal of International Money and Finance, Elsevier, vol. 85(C), pages 20-39.
    13. Pierre-Olivier Gourinchas & Maurice Obstfeld, 2012. "Stories of the Twentieth Century for the Twenty-First," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(1), pages 226-265, January.
    14. Maurice Obstfeld, 2012. "Does the Current Account Still Matter?," American Economic Review, American Economic Association, vol. 102(3), pages 1-23, May.
    15. Meller, Barbara & Metiu, Norbert, 2015. "The synchronization of European credit cycles," Discussion Papers 20/2015, Deutsche Bundesbank.
    16. Ostry, Jonathan D., 2012. "Managing Capital Flows: What Tools to Use?," Asian Development Review, Asian Development Bank, vol. 29(1), pages 83-89.
    17. Rudiger Ahrend & Antoine Goujard, 2012. "International Capital Mobility and Financial Fragility - Part 1. Drivers of Systemic Banking Crises: The Role of Bank-Balance-Sheet Contagion and Financial Account Structure," OECD Economics Department Working Papers 902, OECD Publishing.
    18. Furceri, Davide & Guichard, Stéphanie & Rusticelli, Elena, 2012. "The effect of episodes of large capital inflows on domestic credit," The North American Journal of Economics and Finance, Elsevier, vol. 23(3), pages 325-344.
    19. Seung-Gwan Baek & Chi-Young Song, 2016. "On the Determinants of Surges and Stops in Foreign Loans: An Empirical Investigation," Open Economies Review, Springer, vol. 27(3), pages 405-445, July.
    20. Chen, Jinzhao & Quang, Thérèse, 2014. "The impact of international financial integration on economic growth: New evidence on threshold effects," Economic Modelling, Elsevier, vol. 42(C), pages 475-489.

    More about this item

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bas:econst:y:2021:i:3:p:39-55. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Diana Dimitrova (email available below). General contact details of provider: https://edirc.repec.org/data/ikbasbg.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.