Financial Journal

p. 8-22

Authors: Maksim V. Petrov

The study examines the impact of geopolitical tensions, which have increased sharply in recent times, on international capital flows. It shows that geopolitical tensions affect cross-border investment flows through three main channels: increased geopolitical risks that encourage international investors to reduce investments in countries with different foreign policies; tighter controls on incoming FDI in many countries to ensure national security; and financial sanctions imposed by Western countries to put pressure on other states. Based on the analysis of investment relations between the United States and China, the contradictions between which are the main source of geopolitical tension in the world, the author confirms the conclusion that the influence of geopolitical factors on capital flows between the countries has increased since the second half of the 2010s. However, the study substantiates that the emerging fragmentation of cross-border capital flows can have not only negative, but also positive consequences for the global economy and finance. The compression of capital flows between the countries of the global North and South may push the latter to establish closer integration ties in the financial sector, create financial infrastructure independent of the West, focused on the needs of developing countries, and accelerate the internationalization of their currencies. As a result, these processes could weaken the dominance of Western countries in the global financial system and facilitate its transition to a more equitable multipolar configuration.

p. 40-50

Authors: Ludmila V. Polezharova, Milyausha R. Pinskaya, Ekaterina Yu. Vinogradova

Given the need for the Russian Federation to adapt to sanctions and increase its resilience to new challenges, there is an urgent need to improve tax policy in the sphere of international taxation. This article proposes several conceptual approaches to protecting Russia's tax interests and ensuring its sovereign rights in the international tax sphere. In this regard, the authors conduct an empirical assessment of the consequences for Russia of foreign initiatives to distribute global profits between jurisdictions in the context of the country’s limited participation in traditional information exchange. The assessment addressed the areas of international exchange of tax information and procedures for resolving international tax disputes. The authors suggest measures to counter the erosion of the national tax base in the context of limited cooperation and collaboration in tax administration. Once we have clarified the current multilateral and bilateral international tax treaties with states that have not imposed sanctions on Russia, we will be able to assess the country's attractiveness to investors from these countries and understand the practical implications of the findings.

p. 68-85

Authors: Rodion V. Balakin, Yuliya A. Steshenko

The article presents a review of publications devoted to the approaches to assessing the impact of external shocks on the economy in general and on certain aspects of taxation in particular. It considers both studies that assess this impact by analyzing macroeconomic indicators (less often — budget indicators) and building econometric models (mainly SVAR and VAR models are used in this case), and studies in which various authors propose their own indicators to assess this impact (most often they are either sustainability indicators or stress indicators). Special attention is paid to publications the subject of which is the impact of new challenges on the tax system. A separate block includes publications in which the above issues are considered in relation to the Russian tax system. These are not only scientific articles on the topic, but also documents of international organizations, such as the International Monetary Fund, OECD, World Bank, etc. In addition, the article provides an overview of publications of foreign scientific institutes and research centers. Sanctions imposed on the economy of the Russian Federation are a particular case of an external shock. Thus, a review of publications assessing the impact of new challenges (by the example of sanctions) on the tax system of the Russian Federation is presented. The authors conclude that to assess the impact of new challenges on the tax system it is more advisable to use indicators based on statistical tax reporting.

p. 98-113

Authors: Svetlana I. Chuzhmarova, Andrei I. Chuzhmarov

The presented work touches upon the problem of economic transition to more environmentally friendly types of production and more careful use of resources, which is topical for the world community. The problem of transition from environmentally costly production models to more sustainable ones is reflected in the UN’s Sustainable Development Goal 12, titled “responsible consumption and production”. Achievement of this global goal is impossible without state financial support and investment incentives. One of the main financial instruments of stimulation are taxes, which at the national level allow to directly and indirectly influence producers of environmentally friendly products and their transition to new green technologies, as well as consumers. The problem of increasing the impact of taxes pushes for the transformation of taxation and the formation of new incentives. The arsenal of developed and developing countries has a wide range of fiscal instruments and accumulated experience of tax impact on production and consumption, the study of which can be useful in the formation of tax policy. The purpose of this paper is to analyze the experience of individual countries and systematize the tools of tax incentives for the transition to more environmentally friendly types of production and rational consumption of resources and justification of promising directions of tax impact. Based on the study of international experience, the authors determine the approaches of countries to the construction of tax incentives for the rational development and use of natural resources, reduction of environmental pollution. They also substantiate the need for tax support for building up scientific and technological potential, sustainable tourism and sustainable public procurement. The next promising direction of research may be the formation of tax instruments to eliminate market imbalances reflected in wasteful consumption of resources, transformation of indirect taxation of consumption, tax support for social projects, tax regulation of energy efficiency.

p. 8-26

Authors: Liudmila S. Kabir

The purpose of the study is to systematize the main directions of the discussion that unfolded at the COP28 UN Climate Change Conference in Dubai in November-December 2023 on the need to reform the financial mechanism of the UN climate convention. The relevance of this study is based on the fact that today the conditions have been formed to intensify Russia’s participation in the discussion at the international level on the goals and objectives of climate and sustainable finance, as there is growing dissatisfaction with the aggressive policy of developed countries trying to solve their development problems, including by distorting and replacing the global agenda previously agreed by the majority of the world's countries on the UN platform. The main conclusion of the study is as follows. When considering the problems of organization of both the climate finance mechanism and the sustainable finance mechanism in the context of the organization and functioning of the Technology Mechanism (UNFCCC) and the Technology Facilitation Mechanism (UN 2030 Agenda), embedded in the current discussion on the need to reform the financial mechanism of the UN climate convention, many issues related to the incorrectness, inconsistency and divergence of these concepts at the level of different countries can be effectively addressed by the UNFCCC. Returning the consideration of both climate and sustainable finance to the context of technological modernization tasks solved by society (as originally defined in the UN documents) will make it possible to return the process of transition of countries to a new sustainable development model to the original direction; to get rid of manipulations and substitution of concepts used by a group of developed countries; to reach consensus among all Parties to the Convention.

p. 43-58

Authors: Anton V. Navoy

Fragmentation of the global financial and economic space and difficulties in the organization of international settlements cause the restructuring of the international settlement system of the Russian Federation. Russia’s need for a reliable system of international settlements is due to its rapid involvement in the system of international trade, the need for high-tech imports, sales of raw materials and high-grade goods. One of the most promising options for a new design of payment infrastructure protected from sanctions pressure is the creation of an international payment system based on the peer-to-peer model using central bank digital currencies (CBDC). The Committee on Payment Infrastructures is actively theorizing this model. To date, the Russian Federation (digital ruble) and the People's Republic of China (digital yuan) demonstrate a high level of readiness to make settlements in the CBDC. The creation of a payment system based on CBDC fundamentally changes the entire landscape of international settlements, not only reducing the cost of transactions, but also ensuring their reliability, transparency and protection from the negative influence of other countries. Of particular interest is the model of clearing using CBDC in BRICS countries, which will allow for centralized netting of mutual positions of the countries in national currencies and gradual displacement of currencies of developed countries from mutual settlements.

p. 72-87

Authors: Natalya A. Khutorova

The spread of the sustainable development concept has given rise to sustainable finance, as well as the infrastructure of the financial and consulting industry of valuations, verifications and various databases in the field of ESG. This research is devoted to theoretical and practical study of the accumulated experience of ESG securitization transactions in order to systematize ESG financing instruments and directions of development of this sphere in modern conditions. The study showes that ESG securitization practices are being integrated into capital management processes in line with sustainable development goals, with the most developed centers in the USA, Europe and China. The study systematizes the main types of ESG securitized assets, gives their characteristics and identifies current trends. In Russia, despite its isolation from the world financial markets, the practice of ESG securitization is developing, covering new directions. The study notes the potential for the development of green mortgages, which will contribute to the activation of securitization transactions in the segment of residential and commercial real estate. High potential for development of the social segment of ESG securitization is also noted due to the growing demand for financing social projects in the regions. Expansion of the practice of social mortgage securitization will contribute to the redistribution of risks between the public and private sectors, while active involvement of Russian banks in a variety of ESG lending programs (car loans, lending to small and medium-sized businesses with a green and social focus, e.g. for the construction of social infrastructure, etc.) will expand the market. There is a suggestion that the development of digital ESG securitization platforms will help expand the reach of retail investors, while cooling the junk bond market. The article notes that the expansion of multi-tranche ESG securitization will allow long-term assets of pension funds and various ESG funds to be leveraged into mortgage-backed securities. Overall, ESG securitization improves the structure of transactions, expands the range of derivatives used, improves the quality of credit and interest rate risk management, and contributes to the achievement of sustainable development goals.

p. 104-125

Authors: Mikhail V. Milchakov

The article is devoted to the changes in the fiscal and financial situation of Russian regions in 2020–2022. During this period, the regions faced a new challenge in the form of a pandemic. The author gives a quantitative assessment of the changes that have occurred, analyzes the features of support measures and the regional policy being implemented. The article examines changes in the parameters of regional budget revenues, budget deficits and debt burden. In addition, the author identifies a group of regions with maximum changes in per capita budget revenues and the factors that caused these changes. The author pays special attention to measures in the field of debt policy, methodology for equalization grant allocation, as well as demographic characteristics affecting regional expenditures. The article presents proposals for possible further improvement of the system of interbudgetary fiscal relations, including approaches to the provision of unconditional gap-filling financial support.

p. 8-30

Authors: Elizaveta V. Martyanova, Andrey V. Polbin

The purpose of the study is to assess the impact of alternative options of progressive taxation on Russia’s macroeconomic performance. For quantitative assessments, a neoclassical general equilibrium model with heterogeneous households subject to idiosyncratic income shocks was used. Three groups of scenarios were analyzed, setting a threshold progressive tax scale with thresholds of 30, 50, and 70 thousand rubles, under which state income tax revenues (1) grow, (2) remain unchanged, and (3) decline. The maximum personal income tax rate in the analyzed scenarios was 25%. Steady states and transitions were calculated for the scenarios. According to the quantitative estimates, the first reform leads to a loss of 0.3% to 1.3% of GDP in the long run, depending on the assumed rates and threshold. Despite the increase in lump-sum transfers, aggregate household consumption decreases by 0.5–1.7% in all cases. The second reform leads to a loss of 0.2% to 0.6% of GDP in the long run. The third reform leads to insignificant fluctuations of GDP within 0.1%: GDP increases at the threshold of 30 thousand rubles and decreases at other thresholds. The scale of inequality reduction, as measured by the Gini coefficient, increases with an increase in the top tax rate. However, as the threshold increases, the depth of the Gini index reduction first increases and then decreases. In the short run, there is upward pressure on wages and prices. This is because a decrease in labor supply with unchanged capital in the short run leads to an increase in wage rates (a shift along the labor demand curve), and an increase in wage rates means an increase in marginal costs for firms, leading to higher prices.

p. 45-60

Authors: Elena E. Grishina

The article analyzes changes in the financial situation of large families in the period from 2018 to 2022 using the data of the Rosstat’s Comprehensive Observation of Living Conditions of the Population for 2018 and 2022. The prevalence of various deprivations among large households and households with children in general is estimated. Changes in household income relative to the poverty line and deprivation level between 2018 and 2022 are calculated. It is shown that despite the improvement in financial status between 2018 and 2022, large families continue to experience significant risks of poverty and deprivation. To assess the factors affecting the incomes of large households, Rosstat data of the Sample Survey of Population Income and Participation in Social Programs (VNDN-2022) were used. Regression analysis shows that employment of adult members of a large family, improvement of their education and qualification level will contribute to the growth of average per capita family income relative to the poverty line. The article outlines proposals for increasing the labor potential of large families, improving their financial situation and reducing poverty.

p. 78-95

Authors: Maria V. Sigova, Igor K. Klyuchnikov, Oleg I. Klyuchnikov

Green finance increases the innovation potential of green transformation, helps to address climate change, the environmental crisis and energy security. It is important for green finance to achieve sustainable and balanced development, which will increase the security of both finance itself and many processes in the real economy that depend on it. The purpose of this study was to develop approaches to the ontological design of green finance and multi-agent modeling of the behavior of green finance actors, considering their sustainable and safe interaction. To achieve this goal it was necessary to clarify the conceptual apparatus of green finance and related areas; to characterize the "work" of the multi-agent model in the analysis of the behavior of the main green finance actors and to trace the prospects for their impact on the stability and security of the financial market; and finally, based on ontology construction and agent-based approach to nonlinear interactions in the green financial process, to determine the mechanism of building chains of the main market participants. The methodological basis of the study consists of general scientific research methods (analysis, synthesis, induction, deduction, logic), as well as evolutionary dynamics and agent-based approach to the analysis of financial markets. A comparative analysis of the works of various authors and the interpretation of theoretical provisions in related areas of knowledge about finance, as well as the analysis of their sustainable and safe development were carried out. As a result of the study, the authors identified the main approaches to the design of financial ontology and multi-agent modeling of financial interactions in the direction of determining their sustainable and safe development. The proposed model establishes that the criterion of the effectiveness of the applied strategy is the satisfaction with the state of financial impact on the economy, environment, and social sphere. Maintaining this state, along with saving the amount of resources used, is done through optimization. The chosen approach corresponds to the concept of sustainable development and safe functioning of the systems under consideration.

p. 109-124

Authors: Irina P. Dovbiy, Natalya S. Dovbiy

This study reveals the special role of finance related to the climate and energy transition, the effectiveness of which is evaluated by ESG criteria. The authors define the concept of "sustainable finance" as economic relations within the framework of purposeful formation of capital flows in accordance with ESG principles from public, corporate and private sources and their channeling to achieve the goals of sustainable development, energy transition and adaptation to climate change. It is established that the sustainable development policy implies a comprehensive achievement of goals and solving problems related to the energy transition and overcoming the consequences of climate change, without considering one without the other. The article reveals a connection between the strengthening of climate-related risk management and acceleration of energy consumption, which led to an increase in investor demand for reliable, comprehensive and comparable information. It also reveals significant contradictions between the global players of the global economy regarding the timing and forms of ensuring technological sovereignty and the special role of sustainable finance in achieving it, as well as the importance for Russia to follow global trends in the climate and energy transition. As a special segment of sustainable finance, the field of venture climate finance is developing quite rapidly, but this process is hampered by the lack of adequate information among venture investors about ESG in hightech startup companies and the specter of "black swans" in the financial markets.

p. 8-26

Authors: Aleksandra L. Osmolovskaya-Suslina, Sofiia R. Borisova

This paper presents an analysis of non-resource revenues of the consolidated budget of Russia by types of economic activity. The purpose of this study was to identify which sectors are the most sensitive to shocks form the fiscal point of view, and to answer the questions: how long it takes for the revenues of different sectors recover from “local lows” and how the sectoral structure of budget revenues affects the volatility of payments. In accordance with the set objectives, we examined the dynamics of consolidated budget revenues in real terms for the period 2008–2022 as a whole and by sector. In addition, a sectoral analysis was provided for CIT. The calculations were based on the data of the Federal Tax Service prepared by excluding payments on natural rent. The analysis showed that revenue fluctuations are largely determined by the dynamics of payments from the extractive sector (especially oil production), and an increase in the sector’s share is likely to increase the overall volatility of revenues. In fiscal terms, the processing sector is the most sustainable for total revenues but provides a source of volatility in CIT dynamics. Revenues from financial activities show the fastest recovery from the crises. Trade and finance have a stabilizing effect on both total revenues and CIT dynamics. The results of the study can be used at the stage of budget planning.

p. 43-60

Authors: Alexandr Patalaha, Maria A. Shchepeleva

This research focuses on the determinants of banking crises. Despite all efforts to create systems of leading indicators, banking crises still occur, leading to negative consequences not only in the financial but also in the real sector of the economy. Our objective is to figure out how the characteristics of past banking crises, in particular the amount of liquidity support provided by the government, are related to the probability of subsequent banking crises. To accomplish this task, we use a classification tree methodology which we apply to a sample of 56 countries over the period 2000–2021. In addition to the characteristics of past crisis episodes, we add to the list of potential predictors of banking crises indicators related to the depth, structure and efficiency of the banking sector; institutional and macroeconomic indicators; and the index of macroprudential policy. To test the robustness of our results, we perform variable selection through Bayesian model averaging. Our results suggest that liquidity support during the past banking crisis is important for future crises. We demonstrate that excessive government support aimed at stabilizing the system during a crisis may affect future banking sector stability mainly by increasing the level of moral hazard in the financial system.

p. 76-92

Authors: Pavel K. Koval, Andrey V. Polbin

In modern economic literature, much attention is paid to estimates of the structural parameters of consumer choice and the process of income generation. Such estimations play an important role in determining the optimal insurance system, optimal monetary and fiscal policies, as well as in assessing the welfare of the population. In this paper, we estimate a set of parameters that determine the dynamics of household income and consumption in Russia. These parameters are heterogeneous at the household level; the paper uses the estimation method proposed in [Alan et al., 2018]. To estimate the parameters we use RLMS panel data for the period 2005–2019. The results indicate the presence of significant co-dependent heterogeneity of the parameters determining the dynamics of income and consumption. These results reflect the specifics of the consumer behavior of households in Russia. In particular, significant heterogeneity in the sensitivity of consumption to income shocks indicates a large variability of consumption insurance mechanisms available to households. In addition, there is significant heterogeneity in the dispersion of income shocks, which is critical in the context of the discussion of heterogeneous insurance instruments against income shocks (e.g., access to financial assets), as households with higher variation in unanticipated income change value these instruments more. This study is the first to estimate the full distribution of heterogeneous parameters of consumption and income dynamics using Russian data. Estimates of heterogeneous parameters are important for constructing theoretical models of consumer choice and analyzing optimal social policy. In particular, high values of the level of parameter heterogeneity indicate that standard models with a representative agent are not suitable for optimal policy choices.

p. 110-122

Authors: Ludmila N. Ivanova, Ekaternina N. Badmaeva

In the conditions of expanding interaction between friendly countries, the cross-border approach to economic cooperation in strategically important areas is becoming increasingly important. The methodological basis of this study was the dialectical method of cognition, which allows analyzing and synthesizing economic phenomena, dissecting them into separate elements. The methods of logical, economic and situational analysis were also used. The authors give a bibliographic review of economic cooperation between Russia and the Republic of Kazakhstan using a cross-border approach to the analysis of the precious metals and stones market; show the role of the Republic of Kazakhstan at historical stages in the formation of integration processes in the Eurasian space; characterize the structure of the market of precious metals and stones and products made of them. The market of precious metals, gemstones and products made of them is a promising direction of Kazakhstan's economic development. The Republic of Kazakhstan is successfully improving the state regulation of the precious metals and gemstones industry, taking into account global trends and best practices in this area. Cross-border cooperation between Kazakhstan and Russia will contribute to their further economic development.

p. 8-26

Authors: Anton I. Votinov, Victoria A. Gribova, Samvel S. Lazaryan

This paper attempts to assess the impact of public investment within the framework of a simple DSGE model calibrated on Russian data. To this end, three versions of the DSGE model were constructed. The first model, referred to as the baseline model, assumes efficient allocation of public investment. The second model considers inefficient use of public investment when it is not fully converted into capital. The third model examines crowding out of private investment by public investment. The primary focus of this paper is to analyze the effects of public investment shock on various components of the economy. Two distinct effects are identified with regard to investment. The first effect relates to a short-term increase in demand due to an increase in investment activity. The size of this effect is strongly influenced by the crowding-out phenomenon, in particular by the ability of the economy to absorb investment effectively. The second effect is a reduction in marginal costs in the medium to long run, which facilitates economic growth even at the expense of increased private investment. This effect depends primarily on the efficiency of transformation of public investment into capital. The study also analyzes the sensitivity of the results to parameterization, including the degree of economic openness. The findings of the study explain the transmission mechanism of public investment, including the factors affecting its efficiency. It is important to note that the main objective of the study was to investigate the transmission mechanism and its determinants, while the next stage of the research is expected to include a comprehensive assessment of the parameters using Russian data.

p. 45-60

Authors: Andrey I. Lukashov

The article is devoted to the issues related to the need to improve the efficiency of budget funds. The author proposes to supplement the "classical" criteria of budget funds usage efficiency with the criterion of legality. The study summarizes and analyzes the results of control activities of the Accounts Chamber of the Russian Federation and the Federal Treasury. In view of the significant number of violations detected by the state financial control bodies, the author concludes that it is necessary to improve the treasury control tools, such as treasury service, treasury support, budget monitoring and preliminary control in the field of procurement. The author also considers approaches to improving the operational efficiency of the use of budgetary funds. The empirical basis of the study are the results of the federal budget execution for the past five years, as well as indicators of the federal budget receivables. Special attention is paid to the prospects for the development of centralized budget accounting.

p. 79-83

Authors: Vladimir V. Klimanov, Anna A. Mikhaylova, Zoya I. Egorsheva

At present in Russia there is a need to improve the quality of budget policy as the most important element of state policy, and Moscow is undoubtedly the leading region for its implementation. The purpose of the study is to determine whether Moscow's budget policy can respond to the challenges of the new reality through the instrument of state programs. To achieve this goal, the article considers the retrospective of Moscow budget execution in terms of expenditures, paying special attention to the program structure of expenditures. With the help of statistical and analytical methods the authors analyze the dynamics of budget expenditures distribution within the framework of Moscow state programs, and examine the approved and executed budgets and the percentage of deviation of the executed expenditures from the initially approved ones by subprograms. It is concluded that the Moscow budget is quite adaptive. The dynamics of budget expenditures shows that the distribution of budget allocations has been adjusted due to the need of the megapolis to respond to various challenges. If earlier such challenges included the need to fight the COVID-19 pandemic, now it is a tense foreign policy situation and sanctions from unfriendly states.

p. 117-132

Authors: Vladimir D. Smirnov

Increasing competition in all sectors of the economy, caused by the accelerated introduction of new technological advances in manufacturing processes, the creation of innovative products and the use of new business models, generates increased uncertainty in the development prospects of each market organization. The natural reaction of many commercial structures is to deepen specialization and competencies in their core activities. The purpose of the study is to identify the circumstances affecting interaction between a company and a bank in the new conditions. The article for the first time examines these relationships from the point of view of the need for each party to improve its own business, which objectively requires closer cooperation between them. Based on the results of the study, the author concludes that strengthening collaboration between a firm and a bank in the field of credit and payment operations and management of related risks is based on pursuit of each party’s own goals and increases the value of each of them. Forms of cooperation between a company and a bank can be different, but the most effective for each organization seems to be a partnership form of relationship, allowing the participants of cooperation to receive the greatest benefits and, at the same time, to strengthen and reinforce their positions in the core activities of each party.