Hedge funds and their implications for financial stability

The paper provides an overview of the hedge fund industry, mainly from a financial stability and European angle. It is primarily based on an extensive analysis of information from the TASS database. On the positive side of the financial stability assessment, hedge funds have a role as providers of diversification and liquidity, and they contribute to the integration and completeness of financial markets. Possible negative effects occur through their impact on financial markets (e.g. via crowded trades) and financial institutions (e.g. via prime brokerage). Several initiatives have been launched to address these concerns and most of them follow indirect regulation via banks. If any direct regulation were to be considered, it would probably have to be implemented in a coordinated manner at the international level. At the EU level there is currently no common regulatory regime, although some Member States have adopted national legislation.Asset management, crowded trades, financial regulation, financial stability, hedgefunds, prime brokerage, risk management.

State regulation of the national currency exchange rate by gold and foreign currency reserve management

Status of the national currency of Ukraine exchange rate has been characterized as unstable in recent years. Herewith, the Government has not implemented decisive measures on its stabilization, as a rule, underestimating the importance of the Hryvnia exchange rate stability for the successful economic growth in terms of socio-economic transformations. It should also be noted that in modern conditions among scientific and methodical approaches to the State exchange rate formation mechanisms some uncertainty regarding basic and additional tools for such regulatory activities allocation is still persist. The problem relevance is exacerbated by the lack of effective policy (coordination between the NBU and the Government actions) regarding the national currency stabilization as an indispensable prerequisite for an effective macroeconomic development. These circumstances determine the importance of factors influencing the national currency exchange rate and its regulation tools research, as well as new organizational and economic mechanisms for the national currency exchange rate in Ukraine stabilization identification. In the emerging market economy conditions formation of the efficient State currency exchange-rate regulation system provides an opportunity not only to stabilize its exchange rate in different socio-economic conditions, but to create the basis for improvement the country economic development as a whole. Given this, the issue of effective tools for the national currency exchange-rate regulation by the state determination is of theoretical, practical and methodological significance. This emphasizes the relevance of further scientific-methodological and practical principles in-depth development for the national currency exchange-rate regulation

Money and banks in transition economies: the case of Uzbekistan.

Using the Post Keynesian approach, this study investigates the evolution of money and banks in transition economies in general, and in Uzbekistan in particular. By emphasising the role and importance of institutions in the economic process, the study argues that the evolution of money and banks during transition is a necessarily complex and time-consuming process. By analysing functional differences of money and banks and their evolutionary path in a market economy and in a centrally planned economy, the study suggests that, to reach necessary maturity and to become effective financial intermediaries and creators of new credit, transition banks have to go through several evolutionary phases. This is explained by the historical distinction between cash money and non-cash money, underdeveloped banking habits of the general public, slow and inefficient payments system inherited from the past, and more importantly hyperinflation during the early years of transition. Taking Uzbekistan as a case study, we also argue that the speed of this evolution can vary from country to country depending upon a number of important factors such as the number of years spent under central planning, the degree of centralisation of the economy, the starting date of reforms and their consistency, proximity to large and dynamically functioning market economies, and more importantly entry of foreign banks. Uzbekistan was very slow in reforming its economy and therefore is still far from developing into a market economy. In spite of some positive changes undertaken during the transition period such as establishment of a two-tier banking sector, formal abolition of the distinction between cash money and non-cash money, modernisation of the payments system, controlling inflation, and the establishment of the deposit insurance fund, the banking sector failed to regain the general public’s confidence. We argue that weak development of money and banking in Uzbekistan is largely explained by the current structural organisation of the economy and some sector-specific issues associated with it. The implication of these arguments is that, in order to capture the objective reality of the situation, theories must be developed in particular ways in the context of history, institutional factors, and policy frameworks

From trade to terror: how global banks impact local economies

This thesis investigates three aspects of global banks that go beyond their textbook understanding as lenders and deposit-takers. Using export data from emerging Europe, the first chapter shows that when local banks lose correspondent banking services, their corporate clients reduce exports, leading to decreased revenues and employment. The second chapter investigates the impact of organ trafficking on local conflict. By exploiting exogenous variation in kidney demand from the US waiting list for kidneys, I find that higher US kidney demand increases conflict in localities with a transplanting hospital in countries known for illegal organ trafficking. Based on data from the German credit register and proprietary supervisory information, the third chapter first observes that banks lend more to banks that are similar to them. It then shows how a similar portfolio of the lending and borrowing bank helps overcome information asymmetries in interbank markets