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After having presented various financial instruments and mechanisms available for financing clean energy access projects and companies, this chapter focuses on a key element enabling an efficient use of some of the schemes exposed in the previous section. Indeed, well-functioning capital markets not only increase the trust of potential capital providers, but also enhance financial flows among countries and actors.

In the decade following the introduction of blockchain distributed ledger technology and cryptocurrencies, adoption of the technology lags far behind its potential. Past research identifies knowledge-based trust and understanding as critical to the adoption of technological innovations, particularly in regard to individual willingness to use online financial instruments. Despite negative perceptions of technology identified as key barriers to individual adoption, to the best of our knowledge, little systematic research examines individual attitudes towards the use of blockchain technology or cryptocurrency. We utilize a survey experiment to examine how common discussion contexts surrounding cryptocurrencies influence openness to adoption in comparison to the US dollar. We find that an increased openness to cryptocurrency adoption is associated with messages reflecting (1) the independence of cryptocurrency from political or central bank management and (2) when information describing the security features of blockchain are included. This is consistent with prior research that the socio-technical complexity of a system requires process description in responses. A second important finding suggests that individuals most open to cryptocurrencies as a substitute for the dollar are those benefitting the least from the existing financial system.

This article is dedicated to the assessment of the dynamic fractional asset pricing model for financial risk evaluation and the use of the fractal markets theory to mathematically predict the price dynamics of assets as part of a financial risk management strategy. The article identifies recommendations for assessing financial risk based on mathematical methods for forecasting economic processes. Theoretical and empirical research methods were used. The article reveals the features of mathematical modeling of economic processes related to asset pricing in a volatile market. It is shown that financial mathematics in banking contributes to the stable development of the economy. The mathematical modeling of the price dynamics of financial assets is based on a substantive hypothesis and supported by fractal pair pricing models in order to reveal the specific market relations of business entities. According to the authors, the prospects of using forecast models to minimize the financial risks of derivative financial instruments are positive. The authors conclude that the considered methods contribute to managing financial risks and improving forecasts, including operations with derivatives.

Currently, the development of tourism faces many challenges that make this industry extremely unstable due to political, medical and economic fluctuations. All the ups and downs are usually outside the control of tourism. One of the most important economic problems associated with tourism is the lack of investment and financing. This is a serious problem, considering that tourism is one of the largest employers of labor in the world, and its development has huge benefits for the economy. The purpose of this article is to consider the problems and opportunities in the field of tourism financing. For the purposes of the study, we have achieved a substantial and relevant analysis and research on the main areas of financial support of tourism.

New financial instruments emerge, are tested, appear dead, only to reappear in a more sustainable form. Both commercial paper and high yield bonds are examples as finance evolves with the economy.

Today, an increasingly important role in the economy is being acquired by informatization processes. Digital technologies simplify information transfer and accelerate these processes. The effective use of various complex banking technologies, as well as the use of information and communication technologies in banking operations, can improve the organization of financial products and various tools that are key ways to stimulate the needs and preferences of customers. Various financial innovations, including Internet banking, ATMs, and mobile banks, are increasingly becoming a vital force for diversification, revenue generation, and cost reduction for both banks and customers. The article is devoted to the problem of development of innovations in the field of financial technologies in developing countries. It is shown that, despite a significant increase in innovation activity in the field of the financial sector of the economy, a large number of developments in this area, some gaps remain associated with the practical application, implementation of financial innovations, the use of innovative tools in the field of financial technologies in developing economies, the definition of the role and places of financial innovation in the overall structure of the financial sector. This article aims to fill these gaps. There is a connection between financial innovation and the efficiency of the banking industry for both developed and developing countries around the world. The banking sector in a developing economy is growing thanks to financial innovations in various payment systems, including the use of ATMs, mobile banking, and electronic banking. The aim of the work is to analyze the innovation of risk assessment and risk management in developing countries, for which the following tasks were set: consider the features of information technology, financial instruments, and services; explore diffusion models of banking innovations; identify features of digital solutions in developing countries.

The research aims to provide a comprehensive review of the current state and prospects for deploying the Industry 4.0 digital technologies, primarily artificial intelligence, by the global financial industry to promote sustainable development and tackle global environmental challenges. Analysis of publications of specialized international organizations, statistical data, and news releases has revealed that the financial sector holds a special place in the modern economy and therefore has to play a key role in confronting environmental challenges by mobilizing financial resources for sustainable activities, providing insurance coverage and helping to manage and hedge ESG-associated risks. However, despite the growing willingness of individuals to invest sustainably, institutional investors now face numerous difficulties when trying to respond to this shift in demand by adapting their investment strategies and offering specialized financial instruments. These difficulties include, among others, the lack of standardized definitions of sustainable activities and instruments; the voluntary and inconsistent nature of corporate ESG disclosure; the complex and long-term character of ESG-related risks. Digital technologies, such as big data and artificial intelligence, can contribute to elimination of these difficulties by identifying, collecting, standardizing, and analyzing the vast amounts of inconsistent ESG-related data in order to evaluate sustainability risks and to provide insights on a company’s ESG performance even in the absence of standardized disclosure and at significantly reduced cost in comparison with manual research. However, digital technologies can themselves pose ESG-related risks, producing negative effects on environment, employment, inequality, and raising privacy concerns. It is therefore recommended that national authorities should not only promote the wider use of digital technologies in sustainable finance, but also set up legal frameworks to guard against the associated risks.

The title of this textbook makes it necessary to define the term “financial services” for purposes of exposition and subsequent analysis. It is virtually impossible to describe the extant financial services system as it exists in every distinct region of the globe. The infrastructure holding together the individual pieces that allow cross-border delivery of services was developed by historical accident without a pre-conceived master plan. To resolve these impediments to providing a meaningful narrative of financial services, this chapter focuses upon the UK financial system. It is large in relation to the economy, is an important financial centre for global transactions in financial assets, and has already been mapped by the Bank of England. The UK financial system is a microcosm through which financial services generally may be defined and analysed. Brexit, and the purported loss of London as a global financial centre, are irrelevant for purposes of illustration, since the UK is rich in financial institutions. This chapter is descriptive leaving for later critical analysis of underlying and misleading assumptions.

Housing prices globally remain very expensive for young adults while financial instruments to obtain them become more complicated, demanding, and discouraging, especially in the modern post global financial crisis (2007–2017). The way people acquire homes haven’t change over the last 100 years, maintaining the three classic and dominant alternatives which is either thorough mortgages, cash payments, or combination of these. Young adults have been underserved by financial institutions and their products have not yet met young adults’ conditions. This research has been directed to utilize today’s technology and contribute with innovative financing solutions that can addresses the young adults’ needs. The proposed Fintech approach presents the architecture of a technology-based platform whereby Co-sharing agreements between real estate developers and young adults can be created. Such agreements can be integrated into the financial institutions processes to efficiently address and serve this significant target group by delivering creative innovative financing alternatives.

This chapter provides a critical account of popularly used Islamic financial instruments and discusses the gap between theory and practice in Islamic financial industry. The critical discussion is mainly related to financial innovations, which were derived from concepts including murabahah, ijarah and sukuk. Empirical evidence and/or real-life examples are illustrated to elucidate points. The central thesis of this chapter suggests that an ideal Islamic principle of risk-sharing has not been successfully implemented due to challenges associated with governance (or lack thereof) and behavioural factors including perverse incentives. A solution can be found through effective stakeholders’ education and activism to steer the Islamic finance industry in the right direction.

This paper focuses on the effect of sibship size on risk tolerance. It finds out that the increase of sibling number reduces the risk tolerance of an individual. More specific, an additional sibling decreases 12.7% of an individual’s probability to attend a higher level of financial instrument. Furthermore, there is no difference between male and female.

ESMA (European Securities and Markets Authority) published in December 2014 a document about the regulation norms. In that document the ESMA proposed to skip the exemption option for energy companies for the guidelines of the financial instruments. From Jan. 3 2018 MiFID II (Markets in Financial Instruments II) expanded the catalogue of financial instruments to energy companies. MiFID II requires that – among others – energy companies have the obligations to include the product in position limits, tests for fulfilment of conditions for exclusion, and inclusion in the supervisory regime under the EMIR (European Market Infrastructure Regulation). The MiFID II is obligatory for all EU members.

The chapter deals with results of evaluating the development of banks with state participation and the functioning of development banks in the global and national dimensions. It presents and interprets theories of banking with state participation—social, political and agency. It is concluded that a bank with state participation is the result of positioning the need to achieve the following goals: ensuring the security and stability of the banking system; levelling market failures due to information asymmetry; financing social investments; ensuring financial development and access to competitive banking products and services for customers. It is proposed to use the potential of new development banks; this could achieve national interests and solve the problem of expanding the set of financing sources for capital-intensive infrastructure projects.

The twenty-first century has seen two profound changes occur in the gold market. The first is that the gold price has surged in unexpected ways and secondly, the price appears to have become more volatile over time. This chapter considered the various factors that have shaped gold spot prices over the last two decades and examined the long term gold prices over the last two decades. This is important as two questions, for quite different reasons, arise and are of vital importance to Africa and its economic future. Leaving aside the obvious macro-economic factors associated with the rising or falling price of a dominant export, where Africa was in 2018 the world’s largest supplier of gold, there is an important microeconomic consideration. Without a rising or at least a high price of gold on the world market, the expansion of production of both artisanal small scale mining (ASM) and large scale mining (LSM) would not have occurred. Perhaps just as significantly, the question of volatility stems from the declining industrial demand for gold and the increasing demand for gold as a financial instrument. The traditional industrial role of gold for the production of jewellery is in relative decline. This raises a profound question as to whether the down-stream processing of gold can act as a basis for African industrialisation as it is so commonly assumed in so many of the high level policy pronouncements on the matter.

As citizens, slowly but increasingly, we are translating our concerns about social and environmental problems into our purchasing and consuming behaviors. These concerns must also be taken into account when making decisions about how to invest the money we save, that is, in which bank and in which financial instrument to deposit our money.

Securitization creates a financial instrument by bundling financial assets, such as individual loans, and then selling different tiers of the repackaged instruments to investors. The process transforms a pool of otherwise illiquid assets into tradable securities, enabling investors to purchase a small share of a large asset pool.

The aim of the study is to review and analyze the investment portfolios of life insurance companies in Bulgaria in view of the new regulatory requirements, actual business model trends, and current financial market environment. Investments are an integral part of the life insurance business model. In the study, Bulgarian life insurance sector is examined—regulations on investments, investment policy, and type of investments. Along with this, the accounting approach, accounting treatment, applicable accounting standards, and specific characteristics of all the financial instruments included in the portfolios of Bulgarian life insurance are examined. Last but not least, the paper also investigates whether asset allocation trends for Bulgarian life insurance companies are similar to the trends for European insurance sector.

This chapter focuses on financial investments, coming either from public or private asset managers and institutions. It has two main targeted readers (without any exclusion): (i) public and private capital providers, with the objective of presenting traditional and alternative financial instruments and schemes capable to align risk-return profiles of several investment opportunities in the clean energy sector, (ii) project developers, in order to increase awareness of the financial mechanisms available in the market.

By the end of the twentieth century, the global financial system began experiencing a rapid financial technological development, which culminated in the first decade of the twenty-first century, with extraordinary increase in innovations of financial instruments (mostly technological). Today, a new wave of technological innovations often called “Fintech” is gradually dominating the financial sector. According to KPMG (2017), “the total global investment in Fintech companies increased from US$9 billion in 2010 to over US$25 billion in 2016. Venture capital investment has also risen steadily, from US$0.8 billion in 2010 to US$ 13.6 billion in 2016”. According to consultancy Accenture, more than US$50 billion has been invested in Fintech globally since 2010.

Differences in investor motivations have been largely neglected as a topic in the literature on socially responsible investment. Most research studies consider all investors as a homogeneous group. This chapter aims to contribute to the strand of literature that focuses on dissimilarities. Particular attention is given to motivations that drive individual investors toward socially responsible investment. Motivations, in fact, may influence the financial instruments chosen, the strategy adopted, the amount of money invested, and the level and direction of the trade-off between the two main sources of utility for ethical investors, which are ethics and profit. Furthermore, the concept of “ethical intensity” is introduced to achieve a better understanding of investors’ willingness and effective choice with regard to the ethical investment process. The suggested components of “ethical intensity” are (a) “proximity,” that is, the closeness of an investment’s ethical criteria to an investor’s ethical set of values or moral justification; (b) “social efficacy,” such as the perceived ability to encourage social change; (c) “centrality,” that is, the “position” of the investor in the process; and (d) the temporal immediacy (“urgency”).

In the Accounting Standard IFRS 9, the classification of financial assets and especially the derivation of SPPI criterion for loans as well as bonds is a highly manual process. The author shows how to use Robotic Process Automation and natural language processing to meet the challenge.

This paper attempts to establish a conceptual framework for the solution of blockchain-driven supply chain finance. This framework is designed to facilitate the coordination relationship between buyer and seller. Besides, it alleviates implementation inefficiency in discrete supply chain financial instruments, such as reverse factoring and dynamic discounting. In addition, this paper proposes the value drivers of blockchain technology and elaborates its unique characteristics in the application of supply chain finance. Although blockchain technology is considered a breakthrough financial technology, research on its impact on supply chain finance is scanty. Therefore, this paper contributes to the future development of supply chain finance based on the latest technological innovations.

The paper proposes a neural network model for assessing the impact of financial instruments and organizational forms on the growth of efficiency within the industry based on the case study of such a high-technology company as the Rosatom State Atomic Energy Corporation. A large holding that is a monopoly state corporation (Rosatom SC) manages more than 300 large enterprises which it owns (either fully or partially, through joint ventures, such as JSCs), or controls directly, such as FSUEs (Federal state unitary enterprises) and FSBIs (Federal state budgetary institutions). Objective: To explain the degree of impact of financial instruments and their groups on the overall economic efficiency using a non-recurrent neural network-based analysis, and to build a neural network-based profit generation model. The main criterion for the economic efficiency of the head enterprise of Rosatom group is its combined profit for the year. Since 2007, Rosatom group has used EBITDA as the main indicator of the company’s performance. The Rosatom’s order portfolio exceeds $133 billion, which is 67% of the global nuclear power plant construction market. The present paper suggests a methodology for evaluating the economic efficiency of existing organizational forms, financial instruments and support institutions for Rosatom. The paper proposes an algorithm for building a neural network model for evaluating an enterprise’s efficiency.

The Russian economy is still undergoing profound social and political change and displays many characteristics of an emerging market. Like the other BRIC countries, it offers an enormous growth potential that attracts international investors to the Russian stock market. Due to the high dependency of the economy on natural resources and the generally low productivity, the Russian stock market and the oil price have been often tightly correlated in past periods. Not for the faint-hearted, the investment risk in Russia is higher in comparison with markets of developed countries and thus offers higher yields for most financial instruments.

Rating is one of the most important instruments for regulating financial markets, the main task of which is to assess the quality of assets taking into account risk factors, conducted by independent experts. Ratings characterize the creditworthiness of the borrower, predict trends in it, or characterize the investment attractiveness of the project. They play an important role in decision-making, in establishing and maintaining business relationships. We will consider two types of ratings: credit rating and investment attractiveness rating (although there are other types of credit ratings: ratings of banks and banking groups, insurance companies, issues of financial instruments, regional and municipal authorities, and others).

The chapter aims to analyse the recent reform of the EU regulatory framework as regards insurance-based investment products (IBIPs). The current regime provided for IBIPs offers stronger protection to all customers, regardless of the channel of distribution. In line with the EU plan to provide consistent cross-sectorial investor protection across all Member States, many IDD provisions are based on the corresponding MiFID II rules, even though some differences remain and should be further elaborated in connection with the inconsistencies, overlaps and gaps in the investor protection as far as the distribution of the IBIPs is concerned. Furthermore, several Member States have exercised the discretions recognised by the IDD as regards IBIPs mainly to gold plate investor protection measures. However, such an uncoordinated approach undermines the internal market’s objectives. Therefore, the chapter advises EIOPA to use its powers to coordinate Member States’ measures and ensure transparency about National Competent Authorities’ measures in this respect.