Scenario Design of the Flow of Finances Between Banking and Institutional Sectors in the Regional System

Abstract:

The paper presents the results of the research of the theoretical and methodological features of the scenario approach to the study and forecasting of social and economic processes in the territorial system. Scenario design is presented in the form of a system process. Its stages are scenario analysis, scenario modelling, scenario forecasting and scenario planning, previously considered in the scientific literature as identical research processes within the scenario approach. Special attention is paid to the study of the regularities in the processes of financial flows between the banking and institutional sectors in the regional system (Sverdlovsk region) using a large amount of data from 1999 to 2018. The study has found that in the periods of economic decline and development of crisis, almost all institutional sectors actively withdraw money from the banking sector. The banking sector, in turn, instead of the financial support of the real sector of the economy, speculates with foreign currency, placing funds on deposit at foreign financial institutions, provides loans to foreign organizations, invests in debt securities of foreign issuers. In periods when the economic situation of the institutional sectors is recovered, the reverse processes of the flow of finances are observed. I used the found regularities for the scenario design of the flow of finances between institutional sectors in the Sverdlovsk region. As a result of the use of multiple least squares regression analysis, I have developed three economic and mathematical models corresponding to the baseline scenarios for the possible transformation of the financial flows between sectors. The first ‘business as usual’ scenario is inertial one, assuming that in the future, current trends in flow of finances between sectors will continue. The worst-case scenario is pessimistic, reflecting the deterioration in the financial and economic situation of institutional sectors and the manifestation of the revealed regularities in the processes of financial flows between them during the development of crisis phenomena in the economy. The optimistic scenario characterizes stabilization in the movements of financial flows between sectors.