Imposition of martial law and its consequences for Ukrainian capital markets


The paper dwells upon peculiarities of regulation of financial services markets in Ukraine, considering the state regulators’ redistribution of powers. It was revealed that significant factors of positive perception of the regulation quality and efficiency of markets are operational reliability, flexibility, publicity, information activity, the efficiency of response to external challenges, predictability of actions to implement restrictions and liberalization. The author established that significant risks to the integrity of capital markets are associated with the operational capacity of financial institutions and financial infrastructure entities, and the regulator. The paper states that the total cessation of financial instruments and transactions can be considered justified only for a short and predictable period to minimize the influence of residents of the aggressor state, which in current conditions does not require significant technological difficulties, but only the political will of the regulator. It is substantiated that the permission to circulate only a small share of government securities (military bonds) is insufficient for investment activities, diversification of portfolios of financial institutions and meeting the population’s demand, which in the following conditions can invest in assets devoid of regulatory restrictions or outside the available legal field. The paper discusses the validity of the grounds for termination of government bonds circulation in martial law and mechanisms to minimize the relevant risks of the state and the interests of government bond owners to prevent panic fall in domestic government prices. The author summarized the consequences of long-term restrictions on the circulation of financial instruments and activities of institutional investors for capital markets and specific sectors of the economy, including construction.

  1. Holovko, A.T., Laptiev, S.M., Kabanov, V.H. (2009). Financial instruments markets and their infrastructure: a monograph. Kyiv: “KROK” University [in Ukrainian]

  2. Moshenskyi, S.Z. (2018). Chaos and synergy. Securities market of the post-industrial era. Kyiv: VB Vypol [in Ukrainian]

  3. Rekunenko, I.I. (2013). Infrastructure of the financial market of Ukraine: current status and prospects: monograph. Sumy: State higher educational institution “Ukrainian Academy of Banking of the National Bank of Ukraine” URL: [in Ukrainian]

  4. Oparin, V.M., Fedosov, V.M. (Eds.). (2016). Financial infrastructure of Ukraine: state, problems and prospects for development. Kyiv: State University Kyiv National Economic University Vadym Hetman [in Ukrainian]

  5. Sheludko, N.M. (2020). Investment dysfunction of the stock market in Ukraine: institutional component. In V. Yurchyshyn (Ed.), Economic freedom to strengthen Ukraine’s social and economic development in the context of global transformations (pp. 126-137). Kyiv: Zapovit [in Ukrainian]

  6. Fabozzi, F.J., Modigliani, F.P., Jones, F.J. (2009). Foundations of Financial Markets and Institutions. 4th edition. New York: Prentice-Hall.

  7. Michie, R. (2006). The Global Securities Market. A History. Oxford: Oxford University Press.

  8. Stiglitz, J.E. (2000). Capital Market Liberalization, Economic Growth, and Instability. World Development, 28 (6), 1075-1086.

  9. Rubtsov, B.B. (2007). Modern stock markets. Moscow: Alpina Biznes Buks [in Russian]

  10. Koshovyi, O.H., Tertyshnyk, V.M., Sheludko, N.M. (Eds.). (2019). Capital market abuse: economic and legal aspects. Dnipro: Lira. URL [in Ukrainian]

  11. Sheludko, N.M., Shyshkov, S.Ye. (2020). Institutions of collective investment in Ukraine: scale and consequences of investment dysfunction. Ekon. prognozuvannâ – Economics and forecasting, 2, 120-138. [in Ukrainian]