Convergence of the financial services industry in imperfectly competitive financial market

Gogoski, Risto and Karadjova, Vera (2013) Convergence of the financial services industry in imperfectly competitive financial market. In: XII International Scientific Conference on the Service Sector - Ohrid.

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Abstract

What is wrong with the theoretical display of demand creation and consumer choice of financial services? The answer is the assumption that we surely know prices, income and other variables that take place in that circumstances. But, in reality, the subjects have to choose and make decisions under conditions of uncertainty. In practice that is "solved" with the convergence and regulation of financial services. Convergence as a feature of globalization has strongly affected the sector of financial services. In that sense, banking companies, insurance companies and other investment financial institutions are functionally directed toward mutual cooperation. In this paper we understand financial convergence in accordance to the recommendations of the OECD as a term for all forms of mutual relations of banks and insurance companies as providers of financial services on the one hand, and the applicants for all types of financial products, on the other side. Initially we perceive the levels of convergence between banks and insurance companies: 1) the level of products, 2) the level of financing, 3) the level of investment, 4) the level of financial products distribution, 5) institutional level and 6) the regulatory level. That opens space to form two theses: 1) whether the business in banking and insurance fully merged or it further remains different and 2) whether the regulation should be the same or different (special) for banks and insurance institutions. In addition, regulation of insurance companies and in banking is analyzed by its two aspects: 1) internal supervision, which has microeconomic character and has a goal to provide corporate risks management in a frames of financial corporation operations and 2) regulation by specific regulatory bodies which has a macroeconomic character and is associated with macroeconomic goals such as: monetary stability, growth and development, etc. Key words: demand, asymmetric information, convergence, financial services, risk, regulation

Item Type: Conference or Workshop Item (Paper)
Subjects: Scientific Fields (Frascati) > Social Sciences > Economics and Business
Divisions: Faculty of Tourism and Hospitality
Depositing User: Mr Bojan Sekulovski
Date Deposited: 08 Nov 2017 14:52
Last Modified: 08 Nov 2017 14:52
URI: http://eprints.uklo.edu.mk/id/eprint/949

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