Financial Journal Vol.12 No.5 2020
Interview with Director of the Financial Policy Department of the Ministry of Finance of Russia Ivan A. Chebeskov, p. 9-14
Mariya A. Mihailova, Andrey V. Obynochny, Kristina V. Shvandar
Transformation of the Role of Financial Market Regulators: Statement of the Research Problem, p. 15-29
Rapid socioeconomic development has produced a widening gap between economic theory and reality. As a result, it has become increasingly difficult to objectively assess whether financial regulatory policies adopted by nations worldwide are aligned with the fundamental objectives of stimulating financial market growth and promoting competition, and whether these policies are based on a realistic market picture. Such policy assessments have become particularly challenging for the payments industry and in regards to the regulation governing emergent financial market players from other industries (e.g. Big Tech). Coupled with the radical shift in the role of regulators themselves, this phenomenon raises a variety of scientific questions. Over the past few years, participants in the financial industry, primarily in the payment segment around the world, have, in practice, faced changes in the approaches of central (national) banks to market regulation. In our opinion, the key change lies in the new role that regulation is acquiring: now it not only reacts to market changes by setting a regulatory framework for them, but also becomes the central source and determining instrument of market changes. In this article, we substantiate an approach to the study of the directions of changes in the functions of macroregulation as a single mechanism in relation to a single object, in contrast to the studies available in the scientific literature within the framework of individual segments or infrastructures as well as the practice of regulation. The payment market used as an example is due to the fact that, by now, it is on this market that the changes studied manifest themselves to the greatest extent.
Keywords: regulation, central (national banks), instant payment systems, retail payments, financial market competition, price controls, technology, fintech, bigtech, market development, vehicles (agents) of change, innovation
JEL: G15, G18, G21, G28
For citation: Mihailova M.A., Obynochny A.V., Shvander K.V. Transformation of the Role of Financial Market Regulators: Statement of the Research Problem. Financial Journal, 2020, vol. 12, no. 5, pp. 15–29 (In Russ.). DOI: 10.31107/2075-1990-2020-5-15-29.
Anastasiya A. Anisimova
Opportunities and Prospects for Russia’s Transition to a Cashless Society, p. 30-42
New digital technologies now allow contactless payments to be made both at retail outlets and at a great distance from them. Until recently, such features were only a new tool to provide convenience to customers. Now, with the COVID-19 pandemic, cashless payments have become a necessity all over the world. At the same time, there are objective obstacles to a complete transition to cashless payments. The article analyzes the barriers to the transition to a cashless society exemplified by the EU countries, and assesses the development of cashless payments in Russia. The main obstacles are security in making payments and the isolation of certain population groups from the economic and social life of society. Security issues concern not only the prevention of money theft, but also the prevention of failures in electronic payment systems. People who do not have bank accounts or do not know how to use electronic payment instruments may find themselves in economic and social isolation. This could clearly be seen during the pandemic, when the elderly needed the help of volunteers to purchase goods because they could not use the services of online stores. The article identifies trends in the development of non-cash payments in the EU and Russia, including the circumstances associated with COVID-19. The development of cashless payments depends on economic stability, and one can expect a decrease in consumer activity in the sphere of using non-cash banking services in Russia and other countries due to the world economic crisis in 2020.
Keywords: fnon-cash payments, ATMs, bank account, shadow economy, cashless society
JEL: G20, G21, G23
For citation: Anisimova A.A. Opportunities and Prospects for Russia’s Transition to a Cashless Society. Financial Journal, 2020, vol. 12, no. 5, pp. 30–42 (In Russ.). DOI: 10.31107/2075-1990-2020-5-30-42.
Victor L. Dostov, Pavel M. Shoust, Gleb V. Alekseev, Svetlana V. Krivoruchko
Approaches to Regulating E-Money Market in the Eurasian Economic Community: Comparative Analysis, p. 43-58
The goal of this paper is to identify relevant (general and particular) elements of electronic money regulation in Russia, Kyrgyzstan, Kazakhstan, Belarus and Armenia. For the purposes of comparative analysis, the paper first introduces the methodology by outlining such factors as the legal status of electronic money issuers (including prudential requirements), differentiation of customer due diligence requirements in e-money systems, e-wallet usage rules, and division between the issuing and e-money transfer functionalities. Second, these factors are analyzed for each country, based on current regulatory acts. Finally, synthetic conclusions regarding major regional trends for regulation of e-money as a financial service are made. In most countries, e-money issuers are subject to licensing for the purposes of financial stability. Yet, approaches to differentiating functions of e-money actors vary across countries: in some of them, regulation recognizes “e-money operators” which transfer e-money but do not issue it. However, actual effects of this differentiation merits additional research. Almost all countries have implemented remote (simplified) identification which underlines the role of e-money as a “simplified” product aimed at financial inclusion. All countries except the Republic of Belarus and the Kyrgyz Republic still recognize non-personified electronic wallets. The research confirms that electronic money is still a specific instrument aimed at supporting financial inclusion and satisfying demand for instant cashless payments. More research is required to assess the actual effects of different regulatory approaches on the development of the e-money market.
Keywords: regulation of e-money, Eurasian Economic Community, types of identification, e-money issuers, agents for providing services in the e-money system, e-money operators, e-money institutions, e-wallets, prepaid cards
JEL: G21, G23, G28
Acknowledgements: The paper has been prepared based on state-funded research carried out within a government task by the Financial University.
For citation: Dostov V.L., Shoust P.M., Alekseev G.V., Krivoruchko S.V. Approaches to Regulating E-Money Market in the Eurasian Economic Community: Comparative Analysis. Financial Journal, 2020, vol. 12, no. 5, pp. 43–58 (In Russ.). DOI: 10.31107/2075-1990-2020-5-43-58.
Andrey V. Emelin, Boris G. Perov
Legal Issues of Identification in Remote Financial Services for Individuals, p. 59-74
In connection with the introduction of a high alert and self-isolation regime in the Russian Federation due to the coronavirus pandemic, the issue of remote financial services for individuals, especially the remote opening of accounts, deposits and lending to new customers, is particularly relevant in the banking community. The aim of the article is to propose additional regulatory measures to those already introduced in order to improve the process of financial service provision to individuals in a remote format. The research method is the study of various acts of state bodies (normative acts and newsletters), including those adopted during the period of high alert, as well as surveys of National Council of Financial Market member financial organizations on the impact of measures taken on their activities concerning the provision of services to individuals as well as suggestions for improving them. The article includes an analysis of regulators’ most important decisions on the issue and an evaluation of their impact on the sphere regulated, along with a consideration of international regulating experience in remote identification procedures. Based on the results of the work, conclusions are drawn on the appropriateness and sufficiency of the regulatory measures taken to ensure remote financial services for individuals in conditions of self-isolation as well as on promising ways to further improve the current legislation in this area.
Keywords: financial services, account opening, lending, Bank of Russia, banking, legal regulation, remote identification, remote servicing, pandemic
JEL: G20, G28
For citation: Emelin A.V., Perov B.G. Legal Issues of Identification in Remote Financial Services for Individuals. Financial Journal, 2020, vol. 12, no. 5, pp. 59–74 (In Russ.). DOI: 10.31107/2075-1990-2020-5-59-74.
Alexey V. Maslov, Yulia A. Maklakova
Merchant Acquiring Technology and Problems of Its Regulation in Russia, p. 75-85
This paper examines the evolution of merchant acquiring in Russia. Initially, the term was purely professional and meant the involvement of “service points” in accepting cards. Today it denotes the whole range of business for the creation and development of the infrastructure of non-cash settlement and cash services in trade and service enterprises using payment cards. Technological innovation has spurred the development of acquiring tools. However, today, when the number of non-cash transactions is steadily growing and has almost reached the number of transactions using cash, the issue of acquiring fees is still a burning issue between retail and banks. The authors consider the positions of the two parties to the dispute, and also draw conclusions about the possible consequences if the requirements of retail or banks are satisfied.
Keywords: acquiring, acquiring fees, infrastructure of non-cash settlement and cash services, plastic cards, non-cash payment
JEL: G21, G23
For citation: Maslov A.V., Maklakova Yu.A. Merchant Acquiring Technology and Problems of Its Regulation in Russia. Financial Journal, 2020, vol. 12, no. 5, pp. 75–85 (In Russ.). DOI: 10.31107/2075-1990-2020-5-75-85.
Pavel A. Samiev, Veronika R. Zakirova, Darya V. Shvandar
Ecosystems and Marketplaces: Overview of the Financial Services Market, p. 86-98
The relevance of the research subject is due to global trends in financial market digitalization and new challenges of our time. The spread of globalization processes to the activities of financial organizations determines the trends in digital development of interaction with customers — in particular, growth of consumer demand for remote services in the context of a pandemic stimulates the formation of new financial and digital platforms. The article provides an analytical overview of trends in, obstacles to and prospects for the integration of financial ecosystems and marketplaces in the Russian market. The main conclusions of the work boil down to the need to apply an integrated approach when developing the rules for the functioning of financial and digital ecosystems and marketplaces, taking into account the intersectoral nature of interaction. Regulation will provide a legal framework and help to maintain competition in the market.
Keywords: financial and digital platforms, marketplace, financial ecosystem, structural transformation, end-to-end digital system
JEL: G21, G22, G28
For citation: Samiev P.A., Zakirova V.R., Shvandar D.V. Ecosystems and Marketplaces: Overview of the Financial Services Market. Financial Journal, 2020, vol. 12, no. 5, pp. 86–98 (In Russ.). DOI: 10.31107/2075-1990-2020-5-86-98.
Alexander D. Andryakov, Evgeniy A. Dombrovskiy
Fiscal Measures to Boost the Economic Development of Russian Territories, p. 99-113
Two possible directions of fiscal measures aimed at improving Russian territories’ economic development are discussed in the paper: one at the level of largest agglomerations and another one at the regional level. It is widely accepted that agglomerations are “engines” of economic growth. The Strategy of Spatial Development of the Russian Federation until 2025 pays special attention to the development of agglomerations. However, the latter process has not only natural limitations, but also institutional ones arising from low fiscal independence of municipalities which form agglomerations. To overcome the institutional limitations, the paper proposes a set of fiscal measures, including a redistribution of tax revenues and expenditure obligations between the center of a given agglomeration and the region that contains it. The current fiscal mechanisms of stimulating economic development of Russian regions are analyzed. A mechanism of additional stimulation for regions to develop their own revenue base is proposed; it includes the transfer of receipts of VAT levied with a reduced rate of 10 % to regions in exchange for centralization of some part of corporate income tax in the federal budget. Different scenarios of this exchange are analyzed. It is shown that centralization of the corporate income tax amount corresponding to the 1 % rate in the federal budget in exchange for the transfer of VAT levied with a rate of 10 % to regions with a compensation mechanism within the transferred amounts is neutral to the federal budget and to budgets of the regions which receive equalization grants.
Keywords: agglomerations, fiscal equalization, regions, regional income, stimulation, intergovernmental fiscal relations, intergovernmental grants, VAT, corporate income tax
JEL: H71, H72, H74
For citation: Andryakov A.D., Dombrovskiy E.A. Fiscal Measures to Boost the Economic Development of Russian Territories. Financial Journal, 2020, vol. 12, no. 5, pp. 99–113 (In Russ.). DOI: 10.31107/2075-1990-2020-5-99-113.
Boris I. Alekhin
Regional Tax Autonomy and Budget Balances, p. 114-127
The purpose of this study is to test the proposition that better regional fiscal balances are associated with stronger regional tax autonomy as measured by the ratio of property taxes to expenditures. The study uses panel data for 82 subjects of the Russian Federation over 14 years (2005–2018). A two-step dynamic model of budget balance is estimated by the “system” generalized method of moments. A positive and statistically significant association between fiscal balances and tax autonomy is established. This study emphasizes the importance of regional tax autonomy for the development of market-preserving fiscal federalism in Russia.
Keywords: property tax, tax autonomy, sub-national government, fiscal imbalance
JEL: H62, H71, H77, E62
For citation: Alekhin B.I. Regional Tax Autonomy and Budget Balances. Financial Journal, 2020, vol. 12, no. 5, pp. 114–127 (In Russ.). DOI: 10.31107/2075-1990-2020-5-114-127.