SUITABILITY OF DEVELOPMENT OF THE NATIONAL MARKET OF CREDIT DERIVATIVES

Authors

  • M. A. Koshevtsova Entrepreneur
  • O. G. Rodina Vasyl Stefanyk Precarpathian National University, Ministry of Education and Science of Ukraine, Department of International Economic Relations, Chornovola str., 1, Ivano-Frankivsk, 76000

DOI:

https://doi.org/10.15330/apred.1.16.74-83

Keywords:

credit derivatives market, derivative financial instruments, risk, credit risk, banking

Abstract

The article is devoted to studying of the essence of the credit derivatives market, its advantages and disadvantages, consideration of the suitability of development of the national market of credit derivatives. Categories and instruments of the derivatives market are defined.

Due to the youth of the credit derivatives market, its share in the total volume of derivative transactions is still small, but has great prospects. Their scope is not limited to banking or a single market. The allocation of risk to a separate object of trade has led to the emergence of new forms of credit derivatives, where they can be an alternative to traditional insurance instruments, as well as have very individual approach to managing established risk. In the case of lending, they are simply irreplaceable, as they are a way of insuring for adverse credit risk.

The functions of credit derivatives at the present stage are considered. Strategic directions of development of the domestic derivatives market are determined. It has been found that credit derivatives create the conditions for the accumulation of systemic risks, so increase the degree of probability of the adverse systemic successor caused by exogenous or endogenous reason that lead to financial market instability. These factors must be taken into account press for introduce the use of credit derivatives in the Ukrainian banking sector.

The world experience of organization of credit derivatives market regulation system as a way to minimize negative consequences is analyzed. Given the world experience, we can say that the state pays much attention to the development of the financial market segment, as a market of credit derivatives, which is lacking in the Ukrainian banking sector.

Using the world experience, advantages and possible negative consequences of the credit derivatives market, the credit derivatives market is necessary for the development of lending in Ukraine.

Author Biographies

M. A. Koshevtsova , Entrepreneur

Entrepreneur

O. G. Rodina , Vasyl Stefanyk Precarpathian National University, Ministry of Education and Science of Ukraine, Department of International Economic Relations, Chornovola str., 1, Ivano-Frankivsk, 76000

Ph.D (Econ.),  associate professor

References

1. Myskiv, G. “Credit derivatives as a modern instruments of credit market.” Effective economy, no. 7, 2014. The Vernadsky National Library of Ukraine, nbuv.gov.ua/UJRN/efek_2014_7_10. Accessed 10 Nov. 2020.
2. Kuznetsova, L.V. “Innovative financial instruments to protect the bank from risks in the credit market.” Core, core.ac.uk/download/pdf/147039873.pdf. Accessed 10 Nov. 2020.
3. Minokhina, I. M.” Credit derivatives as a risk management tool and an indicator of crisis phenomena.” Scientific notes. Economics series, issue 14, pp. 324-329.
4. Banking system of Ukraine: institutional changes and innovations: coll. monograph, ed. L.O. Primostka. Кyiv, КNЕU, 2015.
5. Kuznetsova, L.V., and T.Y. Abramova. “Features the use of credit derivatives in the activities of banks.” Scientific Bulletin of Kherson State University, Issue 18, p.1, 2016, pp. 168-171.
6. Furman, V.M. “Complex banking insurance.” Finance, accounting and auditing, no. 1, 2013, pp. 188-200. The Vernadsky National Library of Ukraine, nbuv.gov.ua/UJRN/Foa_2013_1_25. Accessed 10 Nov. 2020.
7. Kucher, T. L., and V.M. Radzievska. “Analysis of the negative consequences of the use of innovative financial instruments in the global financial market.” Finance, Accounting and Auditing, no. 5, 2015, pp. 126–146.
8. Kolodizev, O.M., and O. V. Kotsiuba. “The Analysis of Prospects for Derivatives Market Development in Ukraine in View of Solving the Problems of its Normative Legal Regulation.” Problems of the economy, no. 1, 2016, pp. 242-248. The Vernadsky National Library of Ukraine, nbuv.gov.ua/UJRN/Pekon_2016_1_31. Accessed 10 Nov. 2020.
9. Prymostka, L., and І. Krasnova. “Derivatives exchange market in Ukraine: the history, the present, and future development.” Ukraininan finances, no. 7, 2014, pp. 49-65.
10. Hordon, V.B. Financial derivatives market and prospects of its development in Ukraine. Thesis abstract of Cand. Sc. (Econ.). Kyiv, National Economic University, Kyiv, 2005.

Published

2020-11-25

How to Cite

Koshevtsova , M. A., & Rodina , O. G. (2020). SUITABILITY OF DEVELOPMENT OF THE NATIONAL MARKET OF CREDIT DERIVATIVES. The Actual Problems of Regional Economy Development, 1(16), 74–83. https://doi.org/10.15330/apred.1.16.74-83

Issue

Section

Development of financial-credit and insurance market of Ukraine