Intensification of Capital Market in Financing Real Economy

Mykola Stetsko ()
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Mykola Stetsko: Ternopil National Economic University, Ternopil, Ukraine

Oblik i finansi, 2017, issue 2, 107-115

Abstract: The article defines the place of the range of tools of the capital market in domestic financial enterprises and explains the set of proposals as to intensification of the said market, with the world's trends in a respective field taken into consideration. The role of the securities market in funding domestic enterprises is developed. It is shown that the stock market of Ukraine does not function properly, the volume of capital to be reallocated because of being negligible. It is shown that the essential factor that deters the development of the local capital market is the low rate of protection of property rights. The insufficient protection of property rights fosters racketeering and frauds on the market. The regulatory process must ensure the balance between the proper protection of investors (customers of financial services) and support of the competitive ability of the capital market. At the same time, the excessive regulatory pressure on the stock market creates additional obstacles for potential players and requires additional expenses. The ways of intensifying participation of institutional investors and private households on the market of corporate securities have been outlined. The urgency of stimulated development of the regional capital market, including the establishment of the regional stock exchanges involving various countries with similar economic conditions, has been explained. The inexpedience and futility of the artificially fostered development of particular segments of the financial market owing to the discrimination of others have been proved.

Keywords: capital market; market regulation; corporate securities; protection of investors' rights; corporate management; institutional investors; fictitious assets (search for similar items in EconPapers)
JEL-codes: E44 G30 G32 (search for similar items in EconPapers)
Date: 2017
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