Academic journal article Journal of Economics and Economic Education Research

Megaregulator in the Russian Financial Market: Problems of Formation and Ways of Improvement

Academic journal article Journal of Economics and Economic Education Research

Megaregulator in the Russian Financial Market: Problems of Formation and Ways of Improvement

Article excerpt

INTRODUCTION

The dominant trend in evolution of the financial regulation is transition to the integrated systems, i.e. megaregulation, in the last 15-20 years.Embodiment of the reform concept for the financial services market infrastructure, in particular, formation of a megaregulator, solves the Russian problems of rapid development of the financial industry, technologies, and increased risk, as far as financial instruments, disintegration and intermediary functions of credit institutions are complicated, and banking products and services are universalized as part of their intersectoral combination.

We have noted that the most domestic studies on improvement of the supervisory process taking into account the financial instruments' multipolarization and tasks of control functions' adaptation to the best practices of the industrially developed countries, have general theoretical character; it was also found there is a deficit of applied tools disclosing some methods of practical reforming of domestic surveillance based on the existing risks concentrated at the level of the whole financial sector.

Let us try to determine the content of the "megaregulator" definition. In the opinion of A.V. Romashkin, this is a single authority for regulation of financial and credit relations in the markets of securities, bank services and insurance . According to the point of view of V.V. Mandron, a megaregulator means a model of combined or integrated supervision over the financial sector, main type of institutional structure of the financial regulation, which competence includes the market of securities and banking sector and insurance. Zh.G. Golodova complements the above definitions and notes that the concept of an integrated megaregulator includes not only a megaregulator responsible for all aspects of regulation and supervision throughout the financial system, but also agencies that supervise more than one segment of the financial sector.

In our opinion, megaregulator represents institution acting within the cross-sectoral model of the financial markets regulation and supervision, which is designed to regulate the market participants' activities through the preliminary, current and subsequent oversight of financial operations and transactions.

In most cases, a specially formed autonomous authority, in some states - a state bank serves as a megaregulator. Moreover, in recent years a twin peaks model - concept of integral regulation and supervision becomes prevalent; it is based on the functional principle and covers two independent institutes. One of the peaks is responsible for protecting the rights of financial services consumers, while the second one takes over the prudential supervision mission.

Initially, Singapore took the course towards a new institutional paradigm of the financial regulation, when in 1977, along with its functions of prudential regulation in the banking sector, an analogue of the Central Bank - Money and Credit Department was delegated with the supervisory competence in the insurance market and since 1984 - in the stock market as well. After some time, a number of small European states took this experiment on board: Norway (1986), Iceland and Denmark (1988), followed by Sweden (1991). Such large countries like the UK and Germany moved towards the creation of a megaregulator in 1998 and 2002, respectively, afterwards a victorious period of the integrated model began in the financial industry.

A great many note a potential productivity of the megaregulator's model, at the same time, there are opposing points of view supported by the facts. For example, in the United Kingdom, whose experience is most often cited as a good example, in 2012 the process began to separate the megaregulator into two independent regulators that allows to be skeptical of the megaregulation idea.

METHODOLOGY

Contemporary economic scientists and practitioners consider three main approaches to the megaregulator's creation:

1. …

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