A comparative analysis of principal directions of monetary and fiscal policies

Kosov M.E.

Subject The article reviews current directions in the monetary and fiscal policies that affect economic processes. It systematizes approaches to organization of financial processes and implementation of measures to stimulate economic growth, which are used by developed countries. Objectives The study aims to systematize and perform a comparative analysis of focal points of major directions of monetary and budgetary policies, using the accumulated experience of Russian regulators and international institutions. Methods The study rests on a systems analysis of existing directions in the monetary and budgetary policies of regulators and international institutions. Results We prove that it is necessary to implement active processes of integration of monetary and budgetary policy. The results of the study can be applied when developing approaches to the integration of the policies within the framework of existing programs. Conclusions We describe the current areas implementing the integration processes in the monetary and budgetary policy. We also note potential links and possible vectors for further development of the concept of integration in the declared area.

A methodology to evaluate the efficiency of public health financing in Russia

Yashina N.I., Emel'yanova O.V., Malysheva E.S., Pronchatova-Rubtsova N.N.

Subject The article considers a methodology for evaluating the efficiency of State financing of health care in Russia. Objectives The purpose of the study is to develop an aggregate standard index for performance evaluation of public health funding and determine the level of health system development in the subjects of the Russian Federation based on reported data for 2015. Methods The study employs general scientific methods of comparison, analysis, synthesis, deduction, graphical and tabular representation of data that enable sound estimates and conclusions. We also aggregate indicators of the health system using a composite index with subsequent interpretation of obtained results. Results We developed a standard index to assess the efficiency of public health financing in regions, determined the efficiency of public financing of the health care system in the subjects of the Russian Federation based on reported data for 2015. The paper presents a rating and classification of regions. Conclusions The offered indicators and the composite index describe the main aspects of health functioning and financing in regions. This helps rank the subjects of the Russian Federation and use the results when making decisions about allocation of funds from the Federal government.

A multivariate analysis of the trends in the air transport market in modern conditions

Kuz'mina L.V.

Subject The article investigates trends in the aviation industry of the Russian Federation. Objectives The purpose of the study is to reveal key aspects of the industry and limitations that are currently in force in the Russian Federation, evaluate components of changes in the indicators characterizing the industry functioning to identify patterns and relationships with the realities of economic life. Methods I employ statistical and regression analysis to unveil the components of the dynamics, both of systematic and random nature. Results The paper presents estimates of seasonal fluctuations, trends in the industry indicators over time, proves a significant negative impact of crisis on changes in the industry, and quantifies them. The results of the analysis can be used for planning the current activities of airlines, working out measures of State support to the industry on the basis of obtained estimates of losses in the event of a crisis. Conclusions Significant imbalances in the airfield system development and in the principles of industry organization cause a high dependence of the industry dynamics on market fluctuations.

Calendar anomalies in the Russian stock market: Trends of the recent decade

Val'ko D.V.

Subject The article addresses calendar anomalies (behavioral effects) on the Russian stock market and, in particular, the so-called ‘day-of-the-week effect’ and ‘Monday effect’. Objectives The aim of this work is to analyze the development of the ‘day-of-the-week effect’ and ‘Monday effect’ on the data of the Russian stock market for 2007-2017, and identify on this basis the behavioral differences between the stock markets in Russia and economically developed countries. Methods The study rests on a set of system methods, like the structural-logical and factor analysis. I analyze empirical regularities using the standard statistical methods. Results The day-of-the-week effect, consisting of abnormally low profitability on Wednesday, also continues after the consolidation of trading platforms of MICEX and RTS. At the same time, if in early studies the ‘Friday effect’ was observed, a significantly high yield has been maintained on Mondays during the recent ten years. Conclusions The Russian stock market is similar to the markets of the most developed countries based on the day-of-the-week effect and other behavioral characteristics. However, the domestic stock market is subject to ratchet effects that accompany both the connection with the markets of other financial centers and the cycles in the economy as a whole. This, in our opinion, explains, among other things, the revealed shift in the effects specific to Friday and Monday, to Monday and Wednesday, respectively.

Cryptoassets pricing and equity indices correlation

Mikhailov A.Yu.

Importance The paper investigates the features of cryptoasset pricing and correlation with asset prices in stock markets. Objectives The paper aims to study the factors influencing the price dynamics of Bitcoin. The article is to study if there is any correlation with financial indices such as the S&P 500. Methods The study uses the traditional frequency-domain approach in quantile regression based on the Bayesian method. Results Bitcoin price volatility has a noticeable correlation with the volatility of financial indices, such as S&P 500 due to the spillover effect of the financial markets. But there is no clear relationship found between Google search queries and the Bitcoin price dynamics. Bitcoin prices move primarily under the influence of investors' interest in cryptocurrency as an alternative saving tool. Conclusions and Relevance The practical significance of the work is to structure the existing knowledge about the factors influencing the price of Bitcoin. The given methods have allowed to define the most influential factors explaining dynamics of Bitcoin in 2017.

Cyber attacks as a source of operational risk in electronic banking

Revenkov P.V., Berdyugin A.A.

Importance Due to the use of computer technologies by credit institutions their operational risk is growing. The main task of operational risk management is to streamline banking business processes. The article examines relationships of sources, types and consequences of operational risk in e-banking. Objectives The study aims to analyze operational risk associated with increased access to financial services and develop methods to improve operational risk management in e-banking systems. Methods We employ general scientific methods of cognition, like analysis, synthesis, induction, deduction, and analogy, certain techniques of systems analysis of scientific literature on theoretical and applied research, and a graph method to interpret investigated phenomena. Results Based on reviewed laws and regulations, statistical reports, works of domestic and foreign specialists in banking risk management, we formulate methods for improving the operational risk management in electronic banking systems and recommendations on how to reduce this risk. Conclusions and Relevance The findings may be useful for scientists studying operational risk inherent in remote banking.

Digital economy as a new paradigm of development: Challenges, opportunities, and prospects

Savina T.N.

Importance The penetration of digital technologies into life is the topic of the article. Transition to digitization is one of the key priorities for the development of Russia. Objectives The purpose of the study is to evaluate the advantages and identify the problems of development of the digital economy in Russia. Methods Methodologically, the research is based on the general scientific methods of cognition and specific methods for evaluating the digitization of economic development. Results The role of the digital economy as a new paradigm of development is substantiated. The goals and targets of the digital economy are indicated. The paper identifies positive effects as well as risks (threats) to economic development from digital technologies, and it reveals certain problems of digital economy's development in Russia. Conclusions and Relevance The study shows that total digitization and the introduction of ICT is a natural and inevitable process. The paradigm of digitization has both positive and negative effects. The results of the research can be used in the development of programs and strategies for the digital economy's development.

Economic consequences of disconnecting the Islamic Republic of Iran from the SWIFT international payment system

Omarov K.A.

Subject The article examines the economic consequences of disconnecting the Islamic Republic of Iran from the SWIFT international payment system. Objectives The study aims to propose an alternative method of interbank settlements capable to eliminate the dependence of the Islamic Republic of Iran on the SWIFT payment system. Methods For the study, I employ statistical, comparative and logical methods. Results The sanctions imposed in 2012 against the Islamic Republic of Iran caused a reduction in Gross Domestic Product and export of goods, a high rate of inflation in the country and its currency devaluation. More than a half of Iranian manufacturing enterprises found themselves in a critical state. Conclusions and Relevance Modernization and promotion of the financial messaging system of the Bank of Russia may prove to be quite competitive in the international payment systems market. The symbiosis of the blockchain technology with Russian developments in this area may provoke interest of foreign financial institutions in cooperation in the banking sector and attract new participants worldwide, in particular, where there is a risk of disconnection from the widespread monopolistic payment system of Belgian origin.

Evaluating the efficiency and effectiveness of State (municipal) procurement

Matveeva N.S.

Subject The article reviews existing approaches to and methodology for evaluating the efficiency and effectiveness of State (municipal) procurement. Objectives The purpose of the study is to perform a critical analysis and assess current approaches and methods to measure the efficiency and effectiveness of State (municipal) procurement in the system of public finance, and to build a single model to evaluate the performance of State (municipal) procurement. Methods I apply general scientific methods, like analysis and synthesis, abstraction and generalization, and special methods, namely economic analysis, statistical and economic method, etc. Results The study proves that there is no consistent approach to evaluating the public procurement performance, and establishes a list of indicators and their diversity (economy, efficiency, expediency, productivity, quality, etc.). The review of methodologies for assessing the efficiency of budget process, procurement monitoring and auditing prescribed by laws and regulations shows the lack of continuity in assessing the utilization of public finance to implement State (municipal) procurement to meet the demands of the State and municipalities. Conclusions I demonstrate the need for creating a single methodology to ensure the evaluation of efficiency and effectiveness of procurement of goods, works and services at all stages of the procurement process. It will enable unbiased assessment and prevent a deterioration in public procurement performance.

Financial risks and financial activities of public legal entities

Sabitova N.M.

Importance The article investigates financial risks associated with financial policy of public legal entities being subjects of financial activity. Objectives The aims are to investigate the theory of financial risks inherent in public legal entities based on specifics of their financial activities, consider salient features of financial risks of public legal entities and factors affecting the financial risks of the Russian Federation, the subjects of the Russian Federation, and municipalities, and provide recommendations on financial risk monitoring. Methods The study employs methods of logical and statistical analysis. Results I offer my own approach to defining the financial risk and its elements. The paper proves that financial policy and specifics of financial activities of public legal entities determine the composition of elements of their financial risk, and addresses problems related to financial risk transfer for public legal entities. Conclusions and Relevance Financial policy of public legal entities should consider principles of risk-oriented approach. Financial risk monitoring should cover the activities of all public legal entities and its results should be reflected in financial management quality evaluation of both the subjects of the Russian Federation and municipalities.

Government loans of the Russian Federation: Problems of theory and practice

Lozhechko A.S.

Subject The article addresses government loans of the Russian Federation. Objectives I focus on economic substance of government loans of the Russian Federation, their function, place and role in the financial system of the country, analyze the practice of government loans issuance and repayment, highlight existing problems in this area that relate to publicity and transparency, and offer solutions. Methods The methodology rests on the principles of formal logic. I employ general methods, like deduction, analysis, synthesis, and basic statistical techniques. The analysis exclusively draws on materials that are in the public domain. Results I distinguish the concepts of public debt, public budget loan, and government loan, define the function of the latter, its role in the financial system of the Russian Federation in general and in financial relations in particular, and provide a classification of government loans. The paper offers measures to increase the transparency of management of public loans being a part of State financial assets of the Russian Federation. Conclusions The presented analysis provides a basis for solving theoretical and practical problems associated with issuance and repayment of government loans of the Russian Federation. The study may be of scientific interest and be used in educational process, and of practical value to the Ministry of Finance of the Russian Federation and Vnesheconombank Group.

Improvement of rating methodology

Brusov P.N., Filatova T.V., Orekhova N.P., Kulik V.L.

Importance The article considers rating methodologies, their shortcomings and methods for improving these methodologies. Objectives The paper aims to generalize a new approach to the rating methodology using the modern theory of cost and capital structure by Brusov-Filatova-Orekhova (BFO theory). Methods The study uses the modern theory of capital cost and capital structure by Brusov-Filatova-Orekhova (BFO theory). Results In this work, the methodological and systemic shortcomings of the existing credit rating of non-financial issuers have been analyzed. The financial rating coefficients are incorporated into the general case of the BFO theory. The dependence of the weighted average cost of capital WACC on two types of rating coefficients has been investigated. Conclusions and Relevance Rating agencies, both international and Russian, should apply the developed approach when assessing the creditworthiness of issuers. The proposed method will allow to increase the correctness of various ratings making them more objective.

Modern interpretation of the financial system category

Poltoradneva N.L., Zav'yalova D.A.

Subject The paper investigates the financial system category. The diversity of existing views makes it difficult to understand the essence of the phenomenon in question, because the definitions are often contradictory. Objectives The aim is to obtain an unbiased and complete interpretation of the financial system term on the basis of analysis and generalization of the definition under review. It enables to organize the content of this term and simplify its use in theoretical and practical research, and to improve the quality of lawmaking and regulation. Methods The study applies methods of comparative and logical analysis of various interpretations of the financial system category, which allow formulating evidence-based proposals, thus eliminating the gap between the theoretical model and the practical realities of the financial system’s functioning. Results We review the Russian and foreign scientific literature. The principal difference between foreign interpretations is that the State simultaneously acts as a central link of the financial system and an active participant of the financial market. Conclusions The financial system is a form of organization of economic agents’ cooperation through money and financial instruments. It is in the condition of evolutionary development.

Monetary policy in Russia: Changing the priorities and targets

Butuzova A.S.

Importance The article discusses the issues related to the monetary policy of the Russian Federation. Objectives The article aims to conduct a comprehensive retrospective analysis of the monetary policy of Russia and examine the inflation targeting. Methods For the study, I used the methods of synthesis, retrospective analysis, and data analysis. Results The article reveals certain peculiarities of monetary policy in different periods of economic development. The article analyzes the conditions for the transition to inflation targeting in the Russian Federation. Conclusions and Relevance The article concludes that negative short-term results of the transition to inflation targeting are largely due to the untimeliness of the transition. The specificity of Russian economic development compared with other countries requires a prudential approach.

The role of the Bank of Russia in risk management of insurance companies

Larionov A.V.

Subject The article investigates the reasons for license withdrawal from Russian insurance companies. Objectives The study aims to highlight major factors impacting the stability of insurance companies in Russia and consider opportunities of the Bank of Russia to influence the insurance market development. Methods The Russian regulatory and legal framework for insurance market regulation and supervision served as a source of analysis. Initial computation involved binary and linear regressions. Results The study reveals focal points of the Bank of Russia policy for insurance market development. I analyze major determinants of insurance companies' success. The study confirms the assumption that insurance companies in Russia are mostly affected by risks associated with insurance, rather than investing activities. However, in the event of investment potential development, this source of risk is also significant enough. Conclusions The Bank of Russia needs to monitor the activities of insurance companies. It is necessary to build a model to predict violations of financial stability of insurance companies and pre-emptively identify and support the most vulnerable insurance companies.

The Russian stock market: Problems and the development prospects

Saibel' N.Yu., Koval'chuk A.V.

Importance The stock market is an important tool for economic growth, as it enables to transform savings into investments. The article reviews the conditions of formation of and development trends in the Russian stock market under the global crisis. Objectives The aim is to assess the current state of the Russian stock market, identify key problems hindering its effective development, and devise measures to eliminate them. Methods The study employs logical, statistical and graphical methods of analysis. Results We unveil problems impeding the effective development of the Russian stock market. They include the low level of stock market capitalization, lack of infrastructure, high concentration of capitalization of enterprises operating in the fuel and energy complex, high level of fraud in the Russian stock market, imperfect taxation of transactions of the stock market, high volatility of the Russian securities market, lack of proper protection of investors' rights. The paper offers certain proposals to solve the existing problems, like attracting domestic and foreign investors, improving the regulatory framework and tax system, developing the system of insurance of transactions on the stock market, and others. Conclusions Further development of the Russian stock market is possible only if an integrated approach is applied on the part of the market itself and the State. To attract new investors, it is necessary to regularly enhance the financial literacy of the population and develop new tools for involving citizens in investing.

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