Shcherbina D., Shkil N. O.

Oles Honchar Dnipropetrovsk National University


Financial infrastructure determines the financial and economic development of regions and the state as a whole, the efficiency of their operation, the possibility of entering entities to global economic markets.

In order for an economy to function with constant growth and ensure each its sector to mobilize the necessary funds temporarily available financial resources and redistribute them according to the needs and demands of the economic system. Formation of financial resources is due to: their own and similar funds, which generally includes income from operations, partial investment, equity, trust receipts, etc.; resources that come through redistributive mechanisms, which include budgetary subsidies, grants, insurance compensation; resources that are mobilized in the financial market as a result of securities transactions.

A financial instrument is the just element through which the operations and sales in the financial market are performed. In form it can be short or long-term investment vehicles. These include cash, stocks, bonds, notes, forward and futures contracts, swaps and other derivatives.

By controlling financial infrastructure the government of a country can provide sustainable development, which is based on economic and political stability. I have chosen 3 countries to analyze financial instruments. This analysis will show what positions should Ukraine concentrate attention on based on world experience. Ukraine has economic and political relations which we can divide into three directions: the first is the European Union with the most developed country Germany, USA which has huge influence on globalized world and of course our historical neighbor Russia. Let's start with Germany. The financial sector in Germany is the system based on banks. They satisfy most of the needs of enterprises in the long-term capital, as the population has only a small number of securities and, in turn, prefer to keep their money in bank accounts and insurance savings. Thus, banks accumulate temporarily free financial resources to meet the needs of people and businesses.

The main indicator that characterizes the state of the stock market in the country is an DAX index, which is calculated on the Frankfurt Stock Exchange. It reflects the shares of the 30 largest companies in Germany, which constitute its basis. Calculated as a weighted average capitalization values ​​on stock prices of companies, as well as taking into account dividends received as income from shares, anticipating that they're reinvested in shares. Therefore, the index reflects the total return on capital. The higher DAX index, the better developed stock market, and hence it has a positive effect on the economy as a whole.

German bond yield is generally the same as in the bond rating of other euro zone countries. This is one of the achievements and benefits of the creation of the euro area which is the formation of a single capital market. Board mainly produces two kinds of bonds: long Bundesanleihen (Bunds) and short Bundesobligationen (Bobls). The other tools – up to two years (Schatze) (Treasury notes), six-month federal no coupon bonds (Bubills), financial bill (uverzinsliche Schatzanweisungen). German government bonds with the biggest issue maturing in '30 at a record-low of 2.36% at the end of 2011, according to TD Securities. Bonds are rising in price and yield of bonds with a maturity of 2 years was negative during the last half of 2011, due to the fact that bonds of Germany in Europe belong to the safe deposit facilities.

Next, let's consider features of financial instruments, which are used for national economy regulation, in the United States. Regulator of national economy through financial instruments serves the Federal Reserve System (hereinafter – the Fed), which also is the Central Bank, the Bank for bankers and bank for the government. The Fed is an independent private banking system and it only formally controlled by the government because of its policy to regulate the national economy often do not coincide with the government's policy. Its main task is to control the money supply and credit in the country. If business activity is falling, the Fed is doing its best to extend credit and money supply, but if there is inflation in the country then its actions aimed at preventing such effects. Another important organ that uses financial instruments to influence the national economy is the Committee on the open market operations (FOMC). It shows how much money is necessary for the functioning of the economy and that interest rates should be set.

Consider what way the control over the money supply and interest rates is accomplished. If the Fed plans to reduce the money supply in circulation, for that it reduces bank reserves, with each unit of reduced bank reserves leads to a reduction of five times total bank money. This in turn leads to a reduction in credit, that credit becomes more expensive and less accessible. This, in turn, leads to a private and public investment shrinking. Along with the planned effect of reducing expenditure it also reduces income of the banking sector. Achieved these results by changing the Fed's assets, i.e., government securities and accounting bills. Also, due to changes in the discount rate, the Fed controls the reserves of commercial banks. So is regulates money demand and supply in the country.

The main index, which is calculated in the U.S. to monitor the stock market index is the Dow Jones. For its calculation is used the stock prices of 30 largest companies in the U.S. The higher the index, the better the condition of the national economy. In January 2009 the index decline caused by the financial and economic crisis that began in 2008. Then during 2009–2011 observed its gradual growth. In May 2011 there were maximum since 2009. It was only back in the IV quarter of 2011, the Dow Jones was subjected to reduction, but remains at a higher level than that observed in 2009, and it reflects the gradual exit from the economic crisis and restoring the U.S. national economy.

Analyzing the dynamics of the operations of the Bank of Russia on the open market it can be concluded that in 2008 it was the observed peak of operations on purchase and sale of government securities: the purchases amounted to almost 120 billion rubles, and the sales, in turn, to about 70 billion rubles, which is much higher than the previous year. And in 2009, the global economic crisis affected the Central Bank of Russia. Plummeted volume of sales and purchases of government securities (almost 6 times) and increased sales volumes of corporate securities, which may be done only under direct REPO transactions. Buying government securities in 2010 was generally absent, sales of corporate securities under repurchase agreements increased compared with the previous period slightly.

Thus, analyzing the experience of using financial instruments to regulate the national economy on the example of countries above we see that each country has a lot of financial instruments. Their use is sequential in nature. A separate instrument uses State at that stage where it will be urgent and cause maximum economic benefit.

World experience of usage of financial instruments show that it is a good way to create financial stability in the country. Indicators on the stock market show the real situation in the country and government should pay attention on it developing the economic strategy.