INCREASING THE ROLE OF BANKING INSTITUTIONS IN THE DEVELOPMENT OF THE SECURITIES MARKET IN UKRAINE

Abstract

It is noted that the concept of liquidity in the securities market has a slightly different meaning compared to the concepts of liquidity in securities, banks, or enterprises. Over the years of research, the liquidity of the securities market has been defined in various ways, depending on the specific characteristics under examination. It has been established that businesses accumulate surplus monetary resources (savings) from the public through institutional investors such as pension funds, insurance companies, commercial banks, and investment institutes, converting these resources into investments. The government implements its credit and monetary policies through the issuance of state securities. Fiscal and monetary policies, in turn, serve as tools employed by the government to regulate the interactions of participants in the stock market. Overall, the economic policy of the state, as expressed in the balance between state investments and state consumption, plays a role in determining the wage levels in the public sector, influencing investment opportunities, business needs, and the level of savings among the population.
It is argued that in modern studies, the concept of market liquidity is considered in the context of a specific issuance of securities, with the primary focus on the ability to quickly complete a substantial transaction (involving a significant volume of securities) and its impact on the market price of the specific security issue in question. Moreover, the liquidity of a particular issuance of securities is somewhat interconnected with the overall liquidity of securities since the rapid completion of a substantial transaction with minimal impact on the market price is linked to the investor's ability to quickly sell the security at a reasonable cost. The market density of a specific security issue reveals how much the supply and demand prices (current quotations) of those securities deviate from the average market price. In a liquid market, there is only a minor deviation between supply and demand prices, implying that significant transactions have limited influence on the market price. When determining market density, the spreads between bid and ask prices are often employed, which represent the difference between the asking (selling) and bidding (buying) prices of a specific security issue (the asking price is higher than the bidding price). Generally, the smaller the spread between bid and ask prices, the more liquid the market is, particularly when there is a substantial number of bid submissions.