The Problem of Asymmetric Development of the Global Financial Market

The transformation of the modern global monetary and financial system involves the elimination of institutional and functional contradictions existing at various levels. Some contradictions arose as a result of the asymmetric development of the global financial market (GFM). The aim of the article is to substantiate the asymmetry of the GFM development as an organic phenomenon, which, on the one hand, becomes a serious obstacle to the functioning and progressive development of the world economy, and, on the other hand, is the driving force behind this development. The authors apply general logical, theoretical, empirical, and special research methods. The origins of the asymmetric development of the GFM are determined. Endogenous and exogenous factors of GFM asymmetry were revealed. The article considers examples of asymmetry in various GFM segments. The negative impact of the global financial and economic crisis of 2008–2009 and the coronavirus pandemic on increasing the asymmetry of the GFM development has been determined. Based on the analysis of the key macroeconomic indicators of the top 20 countries in terms of GDP, the asymmetric nature and the absence of stable patterns that determine the country's position in the world ranking are revealed. The authors conclude that the asymmetry of the GFM development is an organic phenomenon, caused by a wide range of causes of endogenous and exogenous nature. Endogenous asymmetries can be partially compensated either through complete economic isolation, which is likely to lead to a slowdown in development and lagging behind other countries in the future or through active involvement in a system of world economic relations based on fair partnerships. Exogenous asymmetry, due to the peculiarities of the historically established world order, is destructive for all participants in the global economic system, including those whose interests must be protected in the first place. © Balyuk I.A., Balyuk M.A., 2022.

Time-frequency volatility transmission among energy commodities and financial markets during the COVID-19 pandemic: A Novel TVP-VAR frequency connectedness approach.

This paper investigates the dynamic volatility spillover among energy commodities and financial markets in pre-and mid-COVID-19 periods by utilizing a novel TVP-VAR frequency connectedness approach and the QMLE-based realized volatility data. Our findings indicate that the volatility spillover is mainly driven by long-term components and prominently time-varying with a remarkable but short-lived surge during the COVID-19 outbreak. We further spot that WTI and NGS are prevailingly transmitting and being exposed to the system volatility simultaneously, especially during the global pandemic, suggesting the energy commodity market becoming more integrated with, more influential and meanwhile vulnerable to global financial markets.

Reserve Currency Competition in a Polycentric World Financial System

This research is devoted to the issues of reserve currency competition in the global financial system. The paper aims to investigate key sources of competitive advantages of reserve currencies in the context of the development of the global financial system towards currency multipolarity and assess how digital transformation can affect the drivers of reserve currenciesf competitive positions in the global financial system. The author uses the following methods of scientific research: analysis, synthesis, ion, deduction, induction, and logical method. The article notes that the financial market capacity is the key factor of reserve currency competitiveness. The author emphasizes that monetary policy instruments that provide funding for financial institutions play a key role in strengthening reserve currency competitiveness in the global financial market. The author highlights that during the COVID.19 crisis monetary policy of the central banks that issue reserve currencies stabilized the situation in the world financial system and strengthened the positions of the major reserve currencies in the global financial market. The author notes that the increase of monetary policy cooperation between central banks points to the evolution of the world financial system towards currency multipolarity. The research emphasized that the development of ecosystems driven by digital transformation can significantly affect the competitive positions of currencies in the global financial system. The author concludes that the global financial system is evolving towards currency multipolarity meaning that the US dollar will remain a leading reserve currency and at the same time other reserve currencies will likely play a bigger role. Further research of currency competition problems may investigate the impact of digital transformation on competitive positions of reserve currencies in the global financial system. © Sakharov D. M., 2022.