The acceleration of the global economy’s financialization with the spread of the COVID-19 pandemic highlights the risks of financial markets volatility, boom and bust cycles, violation of price stability, and debt sustainability. In such conditions, the high degree of Ukraine economy’s external openness, significant amounts of external debt, and lack of domestic investment and credit resources raise the issue of external financial threats to the national economy. This study aims to identify the risks of financialization and debt accumulation across the globe, specify protective arrangements and vulnerabilities of Ukraine’s credit system to external shocks and develop a set of policy actions for global risks mitigation in Ukraine. To achieve this goal, available theoretical sources and policy studies were reviewed, and international databases of financial indicators have been analyzed. As a result, the underdevelopment of the financial system in Ukraine and insufficient use of the credit levers by the private sector are revealed, which impede economic growth but simultaneously mitigate the impact of external shocks in Ukraine’s economy. On the other hand, high external debt reliance is confirmed, which increases the risks of financialization and cross-border capital flows for Ukraine’s economy. A set of financial and organizational measures (targeted at eliminating credit and debt distortions in Ukraine and creating a financial basis for sustainable economic growth) are devised; they refer to development of the national capital market, fiscal policy adjustment, acceleration of the foreign direct investments inflows, shifts in the NBU’s monetary policy, and the management of foreign exchange reserves.

Анотація. У статті розкрито основні тенденції динаміки державного боргу України протягом 2014-2017 рр., проаналізовано індикатори боргового навантаження та вразливості державних фінансів для визначення рівня боргових ризиків у краї ні. Особливу увагу приділено тенденціям приросту державного боргу, пов'язаним із використанням урядом чималої частини запозичених коштів не на фінансування бюджетного дефіциту, а на операції із фінансовими активами. Проаналізовано явища й рішення у сфері економічної політики, які знижують боргову стійкість України та призводять до збільшення тягаря обслуговування боргу. Обґрунтовано цілі й інструменти стратегічного управління державним боргом України, котрі стосуються збереження курсу фіскальної консолідації (з визначенням набору бажаних інструментів останньої), оптимізації співробітництва з міжнародними фінансовими організаціями, розвитку внутрішнього ринку державних запозичень, вдосконалення та розроблення системи імплементації фіскальних правил. Ключові слова: державний борг, позики, боргова стійкість, управління боргом, фіскальні правила, облігації внутрішньої державної позики. Рис. 3. Табл. 5. Літ. 21.Abstract. The author discloses the main trends of public debt dynamics in Ukraine over 2014-2017, analyses debt burden indicators and indicators of pubic finance vulnerability, as well as assesses the debt-related risks in Ukraine. Currently a full range of debt burden indicators appears to surpass their threshold values, identified on the basis of empirical research. The author suggests that a large coefficient of the variation of economic growth and the high shares of public debt held by non-residents and of public debt denominated in foreign-currency increase the exposure of domestic public finances to future shocks. She presents the distortions in public debt accumulation process that are associated with huge bailout transactions and foresees the negative long-term implications of a foreign debt restructuring carried out in 2015. The article contains the main results of debt sustainability analysis (conducted by the IMF in Ukraine), which indicates the high probability of default on Ukraine's public debt in the future. The author reveals phenomena and economic policy decisions, which give rise to debt service costs and endanger public debt sustainability in Ukraine. Based on assessments and conclusions thereby derived, the author proposes a spectrum of fiscal policy and debt management actions that may alleviate a debt overhang problem in Ukraine and mitigate the risks associated with a distorted debt structure. Управління державними фінансами 76 "Фінанси України", 4'2018 Т. П. Богдан доктор экономических наук, заведующая отделом государственных финансов Экспертно-аналитического центра "Оптима", Киев, Украина СТРАТЕГИЧЕСКОЕ УПРАВЛЕНИЕ ГОСУДАРСТВЕННЫМ ДОЛГОМ В УСЛОВИЯХ НЕУСТОЙЧИВОЙ ДОЛГОВОЙ ПОЗИЦИИ Аннотация. В статье раскрыты основные тенденции динамики государственного долга Украины в течение 2014-2017 гг., проанализированы индикаторы долговой нагрузки и уязвимости государственн...

Even diehard proponents of liberalized, open financial markets make some allowance for a CHAPTER 1 Bank loans Portfolio investment: bonds Portfolio investment: equity Foreign direct investment

Introduction. As a result of Russia's military invasion of Ukraine much of its critical infrastructure has been damaged and destroyed. This has led to a deterioration in macroeconomic dynamics, exacerbation of social problems and deepening financial risks. Under such conditions, the issues of financial support of critical infrastructure need in-depth research. Problem Statement. There is a complication of the mobilization of financial resources in the event of a significant increase in expenses. There are problems with attracting additional resources to finance measures to support critical infrastructure in Ukraine. Purpose. The aim is to form a system of financial support for critical infrastructure during martial law and to overcome the consequences of war. Methods. General scientific and special research methods are used: description, analysis, synthesis, grouping, comparison, theoretical generalization, etc. Results. The dynamics of indicators of both domestic and external public debt is determined. The issue of attracting resources provided by foreign partners to finance programs to overcome the consequences of military aggression, as well as support for Ukraine by international financial organizations, is highlighted.. Projects to raise funds for Russian assets frozen in foreign countries to financially support measures to overcome the devastating effects of the war in Ukraine, as well as the introduction of land lease mechanisms and analogue of the Marshall Plan for Ukraine are examined. Conclusions. Due to the armed aggression of the Russian Federation, the pressure on the state and local budgets has increased, which required the application of emergency measures to mobilize revenues and structure expenditures. To balance the state budget, its deficit has been significantly increased, and state internal and external borrowings have been expanded to cover it. Funds from international financial organizations and assistance from foreign countries were also used to finance the state budget. Public and state-guaranteed debts have increased, but they cannot be considered critical. Public debt increased at a faster rate than its guaranteed share, mainly due to the growth of external debt. The internal part of the state-guaranteed debt to support the national economy has increased.

This paper investigates the financial channels of shocks transmission and crises diffusion in an emerging market economy and highlights the role of debtcreating capital flows. Analysing the determinants of capital flows, author decomposes them into the contribution of global «push» factors and country-specific «pull» factors and estimates their significance on Ukraine’s example. Author argues, that «push» factors play a major role in driving capital flows as long as a business cycle in emerging economy is synchronized with a global business cycle; however, being affected by local or regional crisis, emerging economy is getting decoupled from the global developments and «pull» factors are gaining the dominant role. Author also considers the macroeconomic implications of debtcreating capital flows and external debt in emerging market economies and provides empirical estimates of economic growth effect in Ukraine. JEL: F34, F62, F37.