Ekonomika
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The Investment Policy of Deposit Guarantee Funds under Conditions of Limited Domestic Securities Markets
Get PDFDeposit guarantee (insurance) schemes accumulate funds on the basis of guarantee (insurance) contributions. Funds are invested into particular financial instruments in order to increase them. These funds have to be used to pay pay-outs to depositors in the case of the failure of insured members. Therefore, investments must be safe, liquid, and properly diversified. This is especially important to carry out properly for deposit guarantee (insurance) schemes of countries whose domestic securities market is limited. This paper presents an analysis on investment structure of deposit guarantee (insurance) schemes of European countries under conditions of limited domestic securities markets, identifying weak points, and providing conclusions on their improvement. Based on the experience of the Lithuanian Deposit Guarantee Scheme, the structure of investments is examined, pointing to the principal problems and weaknesses of investments under conditions of a limited domestic securities market. The key factors for the investment policy are derived as a result of this analysis
Financial Dollarization: Trojan Horse for Ukraine?
Get PDFThe paper revisits the causes and consequences of financial dollarization in Ukraine during the past decade (monthly data). Dollarization in emerging markets plays a dual role: positive and negative. This study of financial dollarization is in the context of resident household holdings of foreign currency-denominated bank deposits and loans. If exchange rates are stable, deposit dollarization allows the withdrawal of money from the shadow economy, and loan dollarization allows the lending of long-term money, which is not possible with domestic currency due to inflation expectations. At the same time, the instability and lack of supply of foreign currencies in the market result in the collapse of household and bank finances, leading to currency risk, credit risk, and liquidity risk. Therefore, the study uses estimate indicators, the deposit dollarization index (DDI), household foreign currency deposits and loans, loan to deposit ratio (LTD), and inflation to find out the tendencies in the context of a changing domestic currency exchange rate. We present three models to reveal the influence of financial dollarization on banking stability. The first one explains the real value of domestic currency deposits through indicators such as M2 (positive), exchange rate (negative), domestic currency deposits (positive), and panic effects (negative). The second one describes the influence of the exchange rate (negative) and panic effects (negative) on foreign currency deposits. The third one explains the DDI through such the exchange rate, M2, and interest rates. The combined models provide an insight about the time necessary to stabilize the Ukrainian banking system
II Pillar Pension Funds: How the Selection of Fund Influences the Size of the Old-age Pension
Get PDFThe government, in order to achieve the welfare of the citizens in the retirement age to keep pace with the working people, carried out the various pension systems transformations. The working people’s welfare is growing due to the economic progress, so there is a theory of economics, which examines the existing income redistribution in time. It should be noted that in order to ensure the financial well-being in old age it is necessary to efficiently allocate the scarce resources. In Lithuania, the existing three pillar pension system allows each employee to contribute to their own financial well-being in the future. This article aims to assess the second pillar pension fund performance and how fund differences affect the amount of old age pension. The analysis made it possible to determine the correlation between the return generated by the fund and the number of participants in the fund; the spreadsheet is provided, which allows estimating the influence of the choice of different funds on the size of the retirement pension. It was found that fund return and the number of participants in the fund have a negative correlation. This shows that the part of households who raise money in fund with the lowest return will be much poorer, and the corresponding result is a smaller pension. It may be noted that the accumulation of different pension fund reserves have a significant impact on the future pension size (this difference can be as high as 230%)
CREDIT UNIONS’ ACTIVITY AND FACTORS DETERMINING THE CHOICE OF THEM IN LITHUANIA
Get PDFAbstract. In the recent years, the role of credit unions in the financial sector of Lithuania has gradually become more significant. The number of credit unions grew together with their assets, number of members, and deposits. The beginning of a rapid process of credit unions’ establishment and development caused unmeasured risks which led to a suspended activity of several credit unions in 2013. This caused an insignificant migration of credit unions’ shareholders (members) from one union to another, retirements, etc. Although residents haven’t lost the confidence, this fact demands to investigate and analyse the factors determining the choice of a credit union. After a survey of credit union members in Lithuania, the factors most significant for shareholders were determined. Also, the factors least significant for the choice of a credit union were determined, and conclusions and recommendations for managers of credit unions were given. Conclusions and recommendations can help the management to choose the strategy which would result in a higher level of new members’ involvement in the union.Key words: credit union, credit union members, credit union performance, factor analysis, criteria of choic
INTELLIGENT TECHNOLOGIES OF STRATEGIC AND OPERATIVE MANAGEMENT SUPPORT FOR ENTERPRISES
Get PDFAbstract. The article is devoted to the development of a mechanism for the proactive support of strategic and operational decision-making in an enterprise. The starting point for this mechanism should be a model (pattern) of the enterprise, which embodies the principles of balanced strategic measurement systems. Development of the enterprise pattern as an ‘object–project–process–environment’ configuration allows to stitch together the strategic and operational indicators, to provide a vertical continuity, the allocation of responsibilities for the purpose of full control. An effective use of the enterprise data as a strategic resource involves knowledge discovery for decision support through developing interrelated analytical models. Taking into account the limitations of classical methods for strategic and operational management support, Data Mining (DM) is proposed as an adequate modeling tool. A basic set of autonomous DM methods for developing appropriate models is proposed. Besides, it is demonstrated that an effective mechanism for decision support should be based on the application of hybrid intelligent models and methods, and should be brought up to the level of a hybrid decision support system DSS. Achievements of modern information technology (Big Data, analytics in memory, cloud technology, etc.) play in favor of the proposed approach.Key words: strategic management, operative management, intelligent technologies, mechanism for decision support, DS
A COMPREHENSIVE PUBLICATION (“CREDIT UNIONS: THEORY AND PRACTICE”. A scientific monograph by Dr. Filomena Jasevičienė)
Get PDF Dr. Stefan DafernerProject manager, senior consultantAkademie Deutscher Genossenschaften ADGBankCOLLEG, Germany
Dr. Ruta BubnieneProgramme OfficerUnited Nations Climate Change Secretariat, German
ANALYSIS OF THE ATTRACTIVENESS AND COMPETITIVENESS OF THE SECURITIES MARKET IN LITHUANIA
Get PDFThe importance of attractiveness and competitiveness of the Lithuanian stock market has significantly increased in the recent years due to its influence on the capital market as well as on its participants and the economy of the whole country. This article aims to evaluate the attractiveness and competitiveness of Lithuania’s securities market by using a quantitative analysis. It has aimed to define the statistically significant relationship between market attractiveness and competitiveness and the number of listed companies, cross listing, liquidity and trade volumes. The quantitative analysis has provided arguments to conclude that securities market in Lithuania currently is not attractive either from the point of capital supply or from the point of capital demand. In addition, the securities market in Lithuania lacks competitiveness among other markets
TOWARDS A GLOBAL CURRENCY? CONDITION AND SCENARIOS FOR EVOLUTION OF THE INTERNATIONAL MONETARY ORDER
Get PDFThe main goal of the paper is to examine the key features of the current international monetary system and provide an overview of scenarios for the future global monetary arrangements. It is noted that just a few years back there seemed to be a bipolar monetary system based on the U.S. dollar and the euro in the making. The rise of China and the possible emergence of the Chinese renminbi as an international currency gave way to a debate on a tripolar monetary system. Today, the future of the international monetary system is still open. It needs reforming in order to meet the requirements of the new global order with multiple growth centers, the growing role of transnational actors, and the increasing global influence of the major emerging economies.The analysis reveals that the relations among the major international currencies are changing, and today at least three scenarios for the future monetary order seem possible. These are the maintenance of the U.S. dollar domination, a shift towards a multipolar currency order, and the gradual regionalization of the currency order. The concept of a single currency – though theoretically attracting – seems impossible to be implemented in the foreseeable future. The analysis is based on monetary and economic theories, historical patterns of the development of monetary regimes, and an extensive literature overview backed by the data provided by the International Monetary Fund (IMF) and the Bank for International Settlements (BIS).
THE ECONOMIC CYCLE IN POLISH CONSTRUCTION
Get PDFAbstract. The aim of this article is to determine the relation between the phases of the business cycle and changes in prices of factors of construction production. The research covers the years 1994–2012. The dataset applied in the study includes yearly data on prices of the factors of construction production in Poland. All of these data were made available by the SEKOCENBUD. The implementation of the purpose of the study required, firstly, to construct the curve of the economic cycle in the Polish construction industry and, secondly, to determine indicators of changes in the prices of construction production factors and to compare them with the curve reflecting the state of the economic cycle in the construction industry. It was based on the results of a monthly economic situation test, which are published by the Central Statistical Office in Warsaw. A record increase in the prices of production factors in construction was observed during the recovery in 2006–2007. It was caused by the intensified demand for various types of construction services. The deep slump in the construction industry was accompanied by a slight reaction of changes in the prices of construction materials and equipment to the decreasing demand in 2002–2004 and 2008–2012. The results of the study allow to conclude that changes in the prices of production factors in construction are closely related to the situation in the sector, but this relationship is particularly noticeable in the growth phase of the cycle.Key words: economic cycle, building materials and labour, plot of land, real estat
THE IMPACT OF THE FINANCIAL CRISIS ON CURRENT ACCOUNT SUSTAINABILITY IN LITHUANIA
Get PDFAbstract. The paper deals with the dynamics of Lithuania’s current account in two distinct periods – the period in the run-up to the 2008–2009 financial crisis and the period since the crisis. The two main goals of the paper are: 1) to assess the sustainability of the level of Lithuania’s current account in the period 1995–2015 using an empirical model based on the intertemporal optimisation approach, and 2) to identify the factors behind the observed trends in Lithuania’s current account in the two periods in question. The research has been conducted using the methods of empirical (regression) analysis, theoretical explanations, and descriptive analysis. The paper finds that the current account in Lithuania has been sustainable since 1995, except for two brief periods – the 1999 Russian crisis and in 2009 when Lithuania’s economy contracted by more than 15% in real terms due to the global financial crisis. The empirical research has also revealed a shift in the level of the sustainable current account in the post-crisis period but shows an existing gap between the sustainable and the actual current account in Lithuania. Considering the characteristics of Lithuania’s economy, the paper concludes that the actual level of the current account in Lithuania is not optimal from the intertemporal point of view.Key words: intertemporal optimisation, current account, deleveraging, rebalancing, capital fligh