Academic journal article European Research Studies

Process Approach to Modeling of National and Global Securities Market Operation

Academic journal article European Research Studies

Process Approach to Modeling of National and Global Securities Market Operation

Article excerpt

1. Introduction

The securities market plays an important part in the development of business processes and national economics as well. Organized securities market has a complex structure and consists of a large number of different financial institutions and organizations. In most countries, this structure is similar in its institutions (Liapis et al., 2013; Thalassinos and Liapis, 2014; Allegret et al., 2016).

Being the main institution of the securities market, stock exchange interacts with all bidders and institutions that facilitate the organization of securities market operation. The main aim of this article is to research applicability of the process approach to modeling of securities market functioning in order to improve the processes of securities market functioning and to provide the market with the opportunity to reach the higher competitive level.

In order to achieve the stated objective the study will be structured in a certain way. First, present models of securities market will be briefly described. Then we will construct a model of securities market functioning based on the process approach and describe it in details.

The last part of the analysis contains the conclusion that shows that it is possible to apply the process approach to modeling of securities market functioning in order to improve the processes taking place in the securities market.

2. Theoretical, Informational and Empirical, and Methodological Grounds of the Research

There are several models of the securities market functioning in the world (Thalassinos et al., 2015; 2012; Thalassinos and Liapis, 2014; Vovchenko et al., 2017; Kosinova et al., 2016; Glavina, 2015; Radionova et al., 2015; Bondarenko et al., 2017; Vasin et al., 2017). Russia national securities market as well as the Customs Union and the former Soviet republics markets have low indexes of competitiveness. During the last world economic forum 2016 it was noted that in the rating of global competitiveness Russian Federation currently ranks 43rd, having risen by 2 positions in comparison with the previous rating. 140 states took part in the study. The results of the study are reflected in the report "Global Competitiveness Index 2016-2017", prepared in the framework of the World Economic Forum (WEF).

There are several basic models of the securities market, based on the securities market institution, which determines the composition of its participants. Each of these models is characterized by its specific types of securities, infrastructure, intermediaries and the interaction of institutions. There are three models of the securities market functioning: American or stock market model, German or banking model and mixed model. The first model of the securities market emerged in the US and is called stock market or non-banking. Nowadays more than 40% of countries apply this securities market model. This model is called stock market model, due to the fact that only investment banks have access to the stock market.

Bidding for other participants is carried out and supervised by brokerage companies. This measure was undertaken in the conditions of the world economic crisis of the 30s of the XX century. The country's leadership has come to the conclusion that it is unacceptable to concentrate in one hand the issue of securities and credit and deposit operations. The Central Committee coordinating the activities of the US stock market was the Commission on the Securities Market.

The second securities market model, banking model, originated in Germany. It provides for admission to the securities market of various banks and commercial organizations. The banking model is less spread all over the world. Only 10% of countries apply this model in its securities market, it is wide spread mostly in EU countries. Banking model emerged during the Second World War, when the recovery of the participating countries' economies was carried out through the support of the banking system. …

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