Financial Journal

p. 8-28

Authors: Marina Yu. Malkina, Anton O. Ovcharov

The article presents an overview of theoretical approaches to the study of the content and channels of financial contagion, the main methods and models of its quantitative analysis. The results of contemporary domestic and foreign studies devoted to the assessment of the intensity, direction and scale of contagion across countries and industries are discussed. We conclude that Russian researchers pay insufficient attention to this problem. In the practical part of the article, we test hypotheses about the transmission of contagion from the oil market to a number of Russian large companies belonging to different sectors of the economy. Sanctions and pandemic shocks are seen as external triggers for contagion. We use a large amount of oil and stock price data for a period that includes the 2014–2016 monetary and financial crisis and the 2020 pandemic crisis. To distinguish between periods of high and low market volatility, which is necessary to detect contagion, we calculate moving coefficients of variation for oil and stock prices. To identify cases of contagion, we employ the Forbes-Rigobon test, tests for coasymmetry and cocurtosis of distribution. The resulting estimates confirm numerous cases of contagion, with their number increasing as higher distribution moments are analysed. In addition, we conclude that during the 2014–2016 crisis, the Russian oil and gas industry showed the greatest vulnerability to contagion from the oil market. However, the pandemic shock changed the telecommunications sector turned out to be the most susceptible to contagion from the oil market in Russia. The banking sector in both crises showed a high degree of contagion from the oil market. At the same time, companies associated with ferrous and non-ferrous metallurgy, mining and processing of precious metals, as well as the chemical industry demonstrated the greatest resistance to financial contagion.

p. 46-63

Authors: N.A. Avksentiev, A.S. Makarov, Yu.V. Makarova, E.M. Pazukhina, N.N. Sisigina, O.A. Feoktistova, E.E. Zaytseva, S.D. Kuznetsov, A. Paice, K.I Saytkulov

A number of governmental anti-HIV strategic programs are being implemented today in Russia; however, as of 2020, only 74.5% of the infected were aware of their status and only 67.4% of them were receiving the therapy. Under such conditions, it seems reasonable to assess future social and economic consequences depending on various scenarios of centralized financing of anti-HIV activities in the future. With the use of mathematic modelling, an economic analysis was performed for the “no change” scenario of maintaining costs for HIV control at the level of 2020, and a prognosis was made for 4 possible scenarios of national policy changes in relation to federal expenditures: a 25% and 50% increase in expenditures from the level of 2020, a “maximum extensive scenario” (which assumes reaching the upper limit of expenditures with approximately 60% growth while maintaining the current structure of costs), and an “intensive” scenario with an increase in nominal expenditures and shifting costs to purchasing newer third-generation antiretroviral therapy regimens. According to the modelling results, the current financial strategy (the “no change” scenario) in nominal terms will result in HIV mortality growth up to 25 thousand cases annually, the economic burden over the period of 2020–2030 will exceed RUB 4 bln and will not let achieving the national target of “90-90-90” by 2024. Under this scenario, Russia would remain the leader in HIV prevalence among the countries of Eastern Europe and Central Asia. The “no change” scenario would result in indirect economic losses of RUB 3,481.06 bln per year, with epidemiological parameters still high. The most efficient scenario turned out to be the “maximum extensive scenario” that suggests an increase in federal budget expenditures on combating HIV infection by approximately RUB 20 bln annually. This course of events would allow reducing HIV mortality to 5.4 cases per 100 thsd population by 2030, which is comparable to the current HIV mortality in Spain, Italy and Switzerland, and reducing HIV mortality by 111,9 thsd cases to a level comparable to that of the USA, Chile and New Zealand in 2019. The economic benefit from the implementation of this scenario in 2020–2030 would amount to RUB 1,663.02 bln due to decreased direct non-medical and indirect costs in the form of GDP growth and reduced payments of pensions and disability benefits.

p. 79-91

Authors: Yuriy V. Belousov

In the current digital age, budget transparency becomes an important characteristic of the quality of public administration. Over the past two decades, there has been a rapid increase in the level of openness of budget data. However, this is not happening in all countries; the gap in the level of transparency is striking, and it is growing. To a large extent, this level depends on the concept of public administration adopted by this or that state. The paper examines the peculiarities of the budget openness policy in the three most common public administration systems: the Weberian model, New Public Governance and New Public Management. In the countries practicing the Weberian system, budget openness is not maintained or is treated formally. The New Public Governance system, in terms of budget transparency, is mostly focused on the development of democracy rather than on addressing financial issues. New Public Management is aimed at improving the efficiency of public administration. This requires a high level of budget data transparency. However, this level has not yet been achieved; therefore, the real impact of the New Public Management system can only be expected in the future.

p. 108-121

Authors: Galina V. Semeko

In the context of the rapid growth of international cash flows under the influence of globalization and digitalization of the world economy, the disadvantages of the correspondent banking network for crossborder money transfers are becoming increasingly obvious. Cross-border payments continue to be largely based on the old correspondent banking model, which has not quite benefited from the flow of innovations. New technologies have the potential to facilitate fast, low-cost, transparent and scalable payments. There is a need to modernize international payment systems and to develop alternative payment instruments based on new financial technologies. Central banks and the payments industry are considering ways to improve cross-border systems. One of the most relevant and widely discussed new payment instruments is the central bank digital currency (CBDC). А consensus has been reached in the global community on the expediency and profitability of introducing this new form of fiat money into retail payments, and a large number of countries are implementing relevant projects. In contrast, the promotion of the CBDC in the field of wholesale payments is lagging behind. However, studies confirm viability of using the CBDC in wholesale cross-border payments. A number of central banks are working on wholesale cross-border payment models, and international cooperation among central banks on wholesale CBDC, including for cross-border payments, is intensifying. The article discusses how cross-border wholesale CBDC can address challenges of the existing correspondent banking arrangement. The main purpose is to analyze the results of the most advanced international projects aimed at creating cross-border payment systems based on CBDC and distributed ledger technology. The design features of the proposed payment models, their effectiveness and potential risks are considered.

p. 134-147

Authors: Alexey A. Upravitelev

Microfinance is very popular in Russia, but this sphere is often associated with a number of socioeconomic problems, one of which is the population’s debt load. Often the clients of microfinance organizations (MFOs) are citizens from the poorest segments of the population who do not have a high level of financial literacy. The trend towards digitalization of the financial sector has a significant impact on the decision-making process of MFO services consumers. The subject of this paper is the problem of bounded rationality of decision-making, typical for users of online services of microfinance organizations. To reduce the negative effects on users of MFO services, the Central Bank reduces the maximum permissible interest rate for this type of organizations, and the Ministry of Finance organizes programs to improve financial literacy. The aim of the study is to estimate the efficiency of existing methods for solving this problem and to propose our own solution based on the concepts of behavioral imperialism. The relevance is that the digitalization of the financial sector is rapidly increasing, since both classic services are moving online and completely new technological financial services (fintech) appear, which requires the user to master new skills of working in the online environment. In conclusion, the author gives his recommendations for financial literacy programs that can reduce the bounded rationality of financial decision-making.