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The Digitalization of the Russian Financial Market: The Use of Technologies of the Distributed Ledger by the Institutions of Custodian Infrastructure - Pages 497-509

K.R. Adamova and I.E. Pokamestov

DOI: https://doi.org/10.6000/1929-7092.2018.07.46

Published: 12 November 2018

Abstract: Over the past 30 years financial markets have moved from a highly centralized to a globalized system that includes all the world's stock exchanges and other financial institutions. The global stock architecture has united the world market.

Traditionally, trading in financial instruments took place between stock brokers and traders who made personal transactions on trading platforms. At that time, stock brokers were monopolists of the market, only their information, their recommendations were the only source of information for investors. This was before the dotcom revolution, when communication became simple and accessible to everyone. Trade has been transformed from physical to electronic form, today you can buy securities, currencies and any derivatives in any quantity, at any time and from anywhere in the world. Development of blockchain technologies is integrated into financial transactions. Financial intermediaries are forced to follow the market and actively introduce new technologies in their processes.

This article will consider the possibility of using the technology of the distributed ledger by institutions of custodian infrastructure. Today, a number of Russian financial institutions are developing their own projects using blockchain.

Keywords: Blockchain, financial market, custodian infrastructure, securities, distributed ledger.

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Adoption of Blockchain Technology in Trade Finance Process - Pages 510-515

A.V. Bogucharskov, I.E. Pokamestov, K.R. Adamova and Zh.N. Tropina

DOI: https://doi.org/10.6000/1929-7092.2018.07.47

Published: 12 November 2018

Abstract: The complexity of trade finance instruments associated with need for many accompanying documents, constant coordination are problems of this process. Successful development of trade finance instruments depend on improvement of software and implement blockchain solutions that enable companies to unite and through partnerships and process automation to accelerate cash flow and documentation throughout supply chain. The paper aims to examine areas and ways of blockchain application in trade finance and to identify key aspects of improving transactions process. We present possible interaction of participants with digital letters of credit and factoring with blockchain application and display its effect on key trade finance instruments. Moreover, we identifies a number of problems, implementation solutions of which will lead to further more efficient application of technology in supply chain finance. The achieving these goals will lead to further more effective application of blockchain in financing of supply chain. Blockchain with a high level of functionality and security in trade finance processes reduces processing time for documents, transaction costs, expanding number of participants and increases level of transparency.

Keywords: Trade finance, factoring, blockchain, digital letter of credit, smart contract.

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Determinants of Excess Liquidity in the Nigerian Banking System - Pages 516-526

Ujunwa Augustine, Okoyeuzu Chinwe and Wilfred I. Ukpere

DOI: https://doi.org/10.6000/1929-7092.2018.07.48

Published: 12 November 2018

Abstract: This study examines the determinants of excess liquidity in the Nigerian banking system using generalized autoregressive conditional heteroscedasticity (GARCH) for the period January 2008 to December 2015. The identified determinants of banking system excess liquidity are capital importation, Federation Account Allocation Committee (FAAC) distribution, exchange rate premium and policy instruments such as cash reserve ratio, special lending facility rate, Treasury bill rate and interbank rate. The empirical result revealed that the identified determinants have significant effect on banking system excess liquidity in Nigeria. Based on the findings, the study recommends that Nigerian monetary authority could rethink liquidity management in terms of developing robust strategies for mopping up the excess liquidity from the identified sources, rather than concentrating liquidating management strategy on the banking system.

Keywords: Banking System, Excess Liquidity, Monetary Policy.

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The Capital Requirements (Basel III) and the Banking Sector Business Activity - Pages 527-537

^{I.V. Larionova, E.I. Meshkova and S.V. Zubkova}

DOI: https://doi.org/10.6000/1929-7092.2018.07.49

Published: 12 November 2018

Abstract: Active development by international organizations and national regulators of the emergent standards purporting prevention of crises and increase of banking stability is typical for the last years. However, practical implementation of the standards is not so definitive. This article is devoted to the analysis of impact of new requirements in the field of control over the quality and adequacy of the capital of banks, introduction of the additional parameters of risk-related load on the basis of financial leverage on business activity of banking sector.

The issue of correlational study of capital adequacy ratio of banks and their credit activity was considered by different scientists over the last years; however, no decisive results were obtained. At the same time, the belief on the change of capital requirements and bank loans prevails. Generally, after strengthening of capital requirements, the banks reduce the loan growth. The authors of research prove this conclusion for the Russian economy.

Following carried out analysis, the conclusion was also drawn that against the background of essential excess of the planned level of financial leverage, banks generated a highly risky asset portfolio, where the new standard did not address. It is the authors' opinion that for the purpose of impact on financial activity, the leverage levels must be differential for banks having various business models.

Keywords: Basel III, capital adequacy, financial leverage, banking sector, regulation, financial stability, business model, risk.

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