Scientific and practical journal
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Regional Economy
   



Journal Regional Economy -- re2020.02.072

Repository of Institute of Regional Research UDC [338.46:336.7]:330.354:330.356:332.135(477.8); JEL O17, O16, P25
Leshchukh, I. V. (2020). Diahnostyka peredumov ta rivnya tinizatsiyi sektoru finansovykh posluh rehioniv Ukrayiny [Diagnosis of preconditions and level of shadow activity in the financial services sector of the regions of Ukraine]. Rehional'na ekonomika - Regional Economy, 96 (2), 72-84. DOI: https://doi.org/10.36818/1562-0905-2020-2-6. [in Ukrainian].
Sources: 21

Authors



Leshchukh Iryna Volodymyrivna

Ph.D. of Economics

Senior Researcher, Scientific Secretary of the unit of the Department of spatial development of the Dolishniy Institute of Regional Research of NAS of Ukraine

Contacts: ira_leschukh@ukr.net, ira_borsch@mail.ru, (+38096)751-33-89

Webpages:

Resume

The shadow economy nowadays is one of the most substantial threats for the development of the financial sector in Ukraine and is the ground for sham entrepreneurship, corruption, organized crime, etc. The shadow activity phenomenon is, to a certain extent, peculiar to all types of economic activity in Ukraine. The article examines the preconditions for the shadowing of the financial services sector. The level of its shadowing in the context of the regions of Ukraine is calculated. The causal links, features and threats of covert, informal and illegal activities in the financial services sector are studied, in particular: tax evasion (as deliberate concealment / understatement of profits from doing business), unproductive outflow (export) of financial resources, sham entrepreneurship, legalization (laundering) of proceeds from crime and more. The paper establishes that the determinants of creating conditions for efficient legal activity in the financial services sector should be: creating favorable tax conditions for doing business in the studied sector; reducing the gap between the level of interest rates on deposits and loans, reducing the level of interest rates in the economy as a whole, which will make the lending procedure more accessible to individuals and businesses; increasing monetary discipline; strengthening control over financial markets in terms of counteracting unproductive capital outflows through scheme institutions; countering cybercrime; expanding financial inclusion; stimulating and developing innovation in the financial services sector. The paper proves that the real fall in shadow activity in the financial services sector can take place in case of declining costs and growing efficiency of the legal economy and creation of parity conditions for the functioning of various forms of business in the financial domain. The falling fiscal pressure on the legal economy should be the key condition for such a transformation, which would create motivation for transferring the shadow operations to the legal grounds.

Keywords:

shadowing of the economy, shadowing of the financial sector, de-shadowing of the economy, financial services sector, financial services market, financial market

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