Financial instruments of raising household savings for investment purposes: pragmatic and analytical aspects
DOI:
https://doi.org/10.35774/visnyk2018.04.033Keywords:
household savings, investment, financial instruments, financial market, financial assets.Abstract
The article illustrates that the process of reforming Ukraine’s economy has been accompanied by an increasing interest in examining and analyzing the major instruments of household savings, as well as ways of their transformation into investment resources. Thus, the purpose of the study is to deepen the theoretical foundations and develop practical recommendations for transforming savings of national households into investment instruments on the Ukrainian financial market.
It is formulated that the major instruments of household savings in Ukraine include: bank deposits, funds in the accounts of non-bank financial and credit institutions, cash money in national and foreign currencies, securities, gold, etc.
It is pointed out that bank deposits, which are considered to be traditionally more popular and attractive instruments of savings for Ukrainians, not only have significant advantages, but also a number of disadvantages.
The non-bank financial and credit institutions, which cooperate closely with the household sector, include credit unions, life insurance companies, and non-state pension funds. However, their activities cannot be compared with banks when it comes to raising household savings.
As shown in the article, the insufficient use of such financial instruments as securities by national households is a sign of distrust towards the state and stock market institutions (only about 1-2 % of Ukrainians are willing to invest into stock market instruments).
The study indicates that, since the current institutional framework is imperfect, Ukraine’s households cannot function as strategic investors of the national economy.
In order to enhance these processes, state executive and administrative bodies should promote national projects aimed at improving financial condition of Ukraine’s households and strengthening their investment presence on the Ukrainian financial market.
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