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Recently, China has witnessed a continuously increasing Debt-to-GDP ratio and a vigorously expanding shadow banking sector. Housing prices hovering at a high level seriously affect the lives of ordinary residents. Disappointingly, a variety of activities such as intense deleveraging campaigns and tight monetary controls produce little effect. Why do these seemingly rightful implementations hardly work? What should governments do to stop the incessant expansion of asset bubbles? What role ought financial supervisors to play in regulating credit markets and facilitating a sustainable and inclusive economic growth? This paper sets off from the pledgeability of asset bubbles and constructs a generalized overlapping generation (OLG) model incorporating financial frictions and collateral constraints, in order to explore the bubble evolution under the alterations of market interest rates and credit conditions. The results show a unique bubble equilibrium, in which the steady-state bubble size expands when interest rate increases. Numerical results further reveal that the bubble-inflation effect of a higher interest rate is reinforced by a more stringent collateral constraint. Our research contributes to an explanation of the inefficacy of present policies and provides the following policy implications: The combination of an interest rate elevation and a strong loan restriction is in fact undesirable for suppressing asset bubbles. Not merely does it strike productivity and capital formation, but it also fosters investors to hold more risky assets to solve liquidity shortage under constrained borrowing capacity.

У статті на основі аналізу наукових джерел розглянуто зарубіжний досвід регулювання FinTech послуг. Охарактеризовано особливості системи регулювання та нагляду в зарубіжних країнах, визначено переваги та недоліки систем регулювання на основі правил та принципів. Здійснено порівняльний аналіз використання регуляторної «пісочниці» у зарубіжних країнах, визначено спільні та відмінні риси, виділено переваги та недоліки використання даного виду регулювання сфери Fintech послуг. Розроблено структурно-рекомендаційну модель створення вітчизняної регуляторної «пісочниці». В статье на основе анализа научных источников рассмотрен зарубежный опыт регулирования FinTech услуг. Охарактеризованы особенности системы регулирования и надзора в зарубежных странах, определены преимущества и недостатки систем регулирования на основе правил и принципов. Осуществлен сравнительный анализ использования регуляторной «песочницы» в зарубежных странах, определены общие и отличительные черты, выделены преимущества и недостатки использования данного вида регулирования сферы Fintech услуг. Разработана структурно-рекомендательная модель создания отечественной регуляторной «песочницы». The article examines scientific sources about the foreign experience of FinTech services. The features of the regulation and supervision system in foreign countries are described. Considering the potential vulnerability of FinTech to fraud and cybercrime services, supervisors use alternative methods of monitoring and risk control, including: the authority to inspect a third-party provider of FinTech services for the bank; regulatory requirements for contracts that provide the permission for supervision; ongoing monitoring of the FinTech services provider activities. Mostly regulators use two approaches for FinTech services regulation: based on rules and on principles. It was established that in their activity supervisory bodies rely on innovative technologies such as: artificial intelligence; distributed registers; unstructured data analysis. To ensure the right balance between ensuring financial stability and protecting consumer rights, regulators are turning to the development of such methodological approaches and innovative solutions as innovative hubs, Fintech accelerators, regulating “sandboxes”. Also, the comparative analysis of the use of the regulatory “sandbox” in foreign countries was carried out. The key elements of sandboxes are the purpose of creation, the right to contact the sandbox, the criteria for risks, guarantees and other restrictions, the time for application and testing, the costs for the regulator and participants of the “sandbox”, the actions of the regulator after the testing. The common and distinctive features of the “sandboxes” in the countries of the world were characterized. Moreover, the advantages and disadvantages of using this type of the Fintech services regulation were highlighted. The stages of the operating process for potential clients of “sandbox”, which include the stages of preliminary classification, application submission, application evaluation, experiment, ending participation in the “sandbox” were presented. A structural and advisory model for the creation of a national regulatory “sandbox” was developed.

Consumer protection and financial literacy are essential pillars of a well functioning and stable financial system. As the global financial crisis demonstrated, inadequate attention to consumer protection and financial literacy can lead to financial instability. Though Shari’ah principles provide a strong foundation for consumer protection, the principles alone cannot provide adequate protection because not all providers are guided by ethical precepts and the practices have deviated from the principles. To safeguard the stability of the Islamic finance industry, consumer protection frameworks that cater to the specifics of Islamic financial products should be an integral part of regulatory frameworks.

Jaromír Beránek - Comparison of the Market Regulation in the EU and in the USA in the Context of Economic Crisis Abstract: Once the U.S. real estate bubble burst in 2007 and most of the major American banks ran into a financial distress following the rising number of mortgage defaults, few foresaw that these problems would grow into the biggest global crisis since 1930s. Soon it turned out that the fall was inevitable. Due to the lack of regulation an uncontrolled growth in bad credits occurred over the years preceding the crisis outbreak. Financial institutions, silently supported by credit rating agencies, started pushing complicated and opaque investment instruments into the hungry market, and investors gladly bought them, motivated by the promise of high bonuses. The ongoing process of globalization and international linking of financial markets significantly accelerated the evolvement of the crisis and contributed to its spread around the world. Burdened by the immense costs of bank bailouts governments of many countries faced a threat of an imminent bankruptcy, and were forced to seek international aid. In the EU, the USA and on the international scene, several initiatives arose, striving to create effective regulatory reforms and to strengthen tools for a timely identification and prevention of...

The thesis discusses the supervision and regulation of the financial sector in the European Union with a particular focus on the banking market . The aim is to answer the research question , what are the main reasons for the introduction of the banking union in the European Union and what this concept means in practice for the Member States . The first chapter presents general reasons of financial market regulation and puts them into the context of the transformation of a European framework for financial supervision. The second part delas with the central theme of this work , a banking union as an important milestone in the process of european economic and political integration. It explains the factors leading to increased attention devoted to the regulation of banking market. The last chapter provides an analysis of the impact on the Member States of the European Union. Basic consequences arising from the introduction of banking union are analyzed on the case of the Czech Republic. The conclusion brings in attention the factors that are currently on the reform of European banking regulation most emphasized.

On September 3-4, 2009 SUERF and Utrecht University School of Economicsorganized the Colloquium "The Quest for Stability" in Utrecht, the Netherlands. The papers included in this SUERF Study are based on contributions to the Colloquium.