Money, finances and credit

Financial service markets of Eastern Europe: a compositional model

Economic Annals-XXI

Economic Annals-ХХI: Volume 176, Issue 3-4, Pages: 26-37

Citation information:
Shkarlet, S., Dubyna, M., Vovk, V., & Noga, M. (2019). Financial service markets of Eastern Europe: a compositional model. Economic Annals-XXI, 176(3-4), 26-37. doi: https://doi.org/10.21003/ea.V176-03

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Serhiy Shkarlet
D.Sc. (Economics),
Professor,
Honored Scientist of Ukraine,
Chernihiv National University of Technology,
Ministry of Education and Science of Ukraine
95 Shevchenka Str., 14035 Chernihiv, Ukraine
shkarlet@ukr.net
ORCID ID: https://orcid.org/0000-0003-2062-3662

Maksym Dubyna
D.Sc. (Economics),
Associate Professor,
Chernihiv National University of Technology,
Ministry of Education and Science of Ukraine
95 Shevchenka Str., 14035 Chernihiv, Ukraine
maksim-32@ukr.net
ORCID ID: https://orcid.org/0000-0002-5305-7815

Viktoriia Vovk
D.Sc. (Economics),
Professor,
Honored Economist of Ukraine,
Simon Kuznets Kharkiv National University of Economics,
Ministry of Education and Science of Ukraine
9-a Nauky Ave., Kharkiv, 61166, Ukraine
victoriavovk@ukr.net
ORCID ID: http://orcid.org/0000-0001-5680-2967

Marian Noga
PhD (Economics),
Professor,
Business Cooperation Institute,
Wroclaw School of Banking
29-31 Fabryczna Str., Wrocław, 53-609, Poland
marian.noga@wsb.wroclaw.pl
ORCID ID: https://orcid.org/0000-0002-2442-5391

Financial service markets of Eastern Europe: a compositional model

Abstract. The article deals with the models of functioning of financial service markets in the countries of Eastern Europe. The authors have conducted an analysis of the development of financial institutions within separate segments of relevant markets, such as deposit, credit, insurance and investment. The analysis shows that banking institutions play a significant role in the economic development of the countries of the selected group and makes it possible to determine the peculiarities of the development of their financial service markets. In view of the similarity between such countries, the obtained research results can be taken into account when considering other states that have chosen a similar path of their own economic development.

The results allow us to partially predict future transformations in the financial service market of Ukraine by taking into account virtually identical starting conditions for the development of Eastern European countries in the early 1990s. This assumption is also confirmed by the changes that have already taken place in Ukraine in view of the functioning of the country’s banking system, which has led to a decrease in the number of banks and an increase in their financial stability. This is consistent with the development of banking systems in other Eastern European countries. This allows us to assert that there is gradual convergence of the functioning of the banking systems of both Eastern European countries and Ukraine. A detailed analysis of the transformations in the banking system gives reason to state that in the future the same changes are expected in other segments of the financial service market. In Ukraine, the markets of insurance services, services of non-state pension funds and investment companies remain poorly developed. The transformation of the relevant segments of the financial services market is a prerequisite for its further development.

Keywords: Financial Service Market; Compositional Model; Banking Institutions; Insurance Companies; Bank-centred Model

JEL Classіfіcatіon: G1

Acknowledgements and Funding: The authors received no direct funding for this research.

Contribution: The authors contributed equally to this work.

DOI: https://doi.org/10.21003/ea.V176-03

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Received 4.02.2019
Received in revised form 20.03.2019
Accepted 24.03.2019
Available online 20.08.2019

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