Lyudmyla Shkvarchuk

Financial imbalance is the reason of a macroeconomic instability. This study aims at identifying the institutional causes of financial markets imbalance. The authors consider that financial intermediaries in Ukraine work in a speculative market segment carrying out high-risk transactions with the purpose of earning a huge profit. In fact, in Ukraine the role of these institutions in the investment process financing is insignificant. The authors show that soundness of banks along with the ease of access to loans and a low level of confidence in national banking system are the main reasons of instability in financial market in Ukraine. Due to scarcity of financial capacity and refusal to carry out transactions in a high-risk market segments, insurance companies are unable to entirely perform functions of risk redistribution. Competitiveness of Ukrainian financial market remains low with a limited financial services nomenclature and it may be considered to be attractive for potential foreign investors.

Household demand for credits is quite volatile, which requires constant evaluation of it changes. The purpose of the paper is to identify quantitative signals, the use of which increases the predictability of the credit market development. The study utilizes technical analysis methods for an econometric estimation of trends in household demand for credits in Ukraine for the 2002–2019 period. Based on the analysis of historical market lows, it was argued that with all the negative effects of destabilizing factors, the household demand for loans will not fall below the market support point of UAH 50 million. The financial behavior of Ukrainian households when choosing the type of loan is stable and does not change with fluctuations in GDP. Short-term loans are quite dynamic and largely depend on macroeconomic conditions, provoking market movements. If the relevant direction is supported by medium-term loans, the general market trend will correspond to the GDP trend. The demand for long-term loans is quite inertial, its change does not affect the overall market trend. The constant and variable elements of household demand for credit are highlighted.