Iryna Shalyhina

Adjusting the balanced movement of financial flows in the budget process is a vital component of ensuring the functioning of the financial system. This study aims to identify and outline possible areas for improving the management of financial flows in the budget process of Ukraine to regulate structural imbalances of the financial system. With the help of ranking and clustering, the analysis and assessment of local budgets based on indicators that characterize the movement of financial flows was carried out. The used methods made it possible to consider the differences in the formation and direction of budget flows of territorial communities and determine the progress of administrative-territorial units. An assessment of the state of financial flows consolidated in the treasury single account of Ukraine was conducted: the dynamics of balance, the volume of loans and repayments to local budgets, and the Pension Fund of Ukraine were considered. The assessment results made it possible to determine the directions of setting a stable and balanced movement of financial flows and levers to regulate the impact of structural imbalances of the financial system related to the management of cash balances of the treasury single account and increase of its liquidity. The volumes of revenues, expenditures, deficit, and borrowings to the State Budget of Ukraine were estimated to determine the conditions that cause imbalances in the financial system. The directions for timely and complete execution of the decisions by state authorities and local self-governments are outlined.

This paper explores market efficiency in the Ukrainian stock market to determine whether there are differences between traditional and ESG indices. Different data properties related to market efficiency are explored: persistence (R/S analysis is used for these purposes), stationarity (ADF tests), normality (Kolmogorov-Smirnoff, Anderson-Darling test, etc.), resistance to market anomalies (Day of the week effect, abnormal returns and patterns they generate are tested using parametrical and non-parametrical statistical tests), etc. Database includes daily data from 2 conventional Ukrainian stock market indices (UX and PFTS) and ESG index (WIG Ukraine) over the period 2015–2022. The following hypothesis is tested in this paper: ESG indices are more efficient than traditional ones. The findings suggest that there are no significant differences between traditional and ESG indices: they have the same persistence, stationarity, do not fit normal distribution and are not influenced by explored market anomalies. So, despite the fact that companies listed in the ESG index are more transparent and thus characterized by lower information asymmetry, they are more liquid and popular among investors, ESG index is not more efficient than traditional ones. This might be the result of unfair practices called “washing” aimed at signaling the active ESG involvement with actual absence of it. This means that many ESG companies are actually traditional. To prevent such practices, the ESG reporting regulation needs to be revised.

Acknowledgment
Alex Plastun gratefully acknowledges financial support from the Ministry of Education and Science of Ukraine (0121U100473).

This paper investigates the interaction between decentralized financial services and the traditional banking system by building VAR models, conducting Granger causality tests, building impulse response functions, and performing variance analysis. To implement the model, banking indicators of the USA, India, and Great Britain were selected: the volume of commercial and industrial loans, interest rate, consumer price index, total liabilities and capital of banks, aggregate deposits, federal funds rate (for the USA), and repo rate (for India). The study examined central bank data of the specified countries from July 2018 to January 2024 with the TVL indicator, which measures the sum of all assets locked in DeFi protocols. The results of the impulse response function (IRF) for countries demonstrate different interactions between TVL and bank indicators. The US response to TVL shocks demonstrates a stimulative monetary policy, with significant Fed rate reductions and increased commercial lending to boost economic activity. In contrast, India’s monetary stimulus, marked by declining repo rates and growth in banking sector liabilities and deposits, aims to enhance economic resilience. The UK, however, adopts a conservative monetary approach, with sharp bank rate increases and mixed lending and deposit responses, prioritizing financial stability. Analysis across these nations highlights different impacts of financial indicators on TVL. In the US, the evolving relationship between TVL and bank indicators reflects the financial system’s complexity. India’s sensitivity to monetary policy, credit conditions, and inflation significantly influences TVL. In the UK, central bank decisions, particularly the bank rate, play a crucial role in financial market dynamics.

Acknowledgment
The authors appreciate the assistance in the preparation of the article provided by the University of Debrecen Program for Scientific Publication and the János Bolyai Research Scholarship of the Hungarian Academy of Sciences.