Role, functions and principles of investment activities of banks on the stock market: foreign and domestic experience
Year: 2025
Type: article
Abstract: The stock market plays a vital role in ensuring the stability and dynamic development of the financial system by facilitating efficient capital allocation between savers and investors. Banks act as key intermediaries in this process, offering a broad range of financial services that enhance liquidity, stability, and the attractiveness of capital markets. In the context of global financial transformation and tightening regulatory standards, banks' activities on the stock market are acquiring new forms and content. This study aims to determine the role, functions, and principles of banks' participation in the stock market based on foreign and Ukrainian experience and to justify prospects for the development of investment banking services in Ukraine. The research is based on a comparative analysis of the practices of global financial institutions (e.g., Goldman Sachs, JPMorgan Chase, HSBC, BNP Paribas) and leading Ukrainian banks. The study applies structural-functional and system approaches to outline the transformation of banks' investment roles under current economic conditions. The paper identifies the main functions performed by banks in the stock market: underwriting (IPO/SEO), brokerage and dealing services, asset management, custodial and clearing activities, and financial consulting. A comparative table highlights differences between international and Ukrainian banks in terms of investment activity. While global banks integrate investment banking with brokerage and asset management, Ukrainian banks mostly focus on servicing government securities (OVDP). However, the emergence of green bonds and ESG-financing reflects growing diversification potential in the domestic market. The outlined functional model of banks' investment activity can serve as a methodological basis for improving national financial infrastructure, strengthening the stock market’s institutional capacity, and increasing financial stability through expanded banking services. Banks are essential in stabilizing and developing the stock market by performing multifunctional roles. Ukrainian banks, although limited by infrastructural and regulatory constraints, show promising shifts toward expanded investment functions. Further integration of banking and capital markets is necessary to diversify financial instruments beyond government bonds. Future studies should focus on forming regulatory models and financial incentives to promote investment banking in Ukraine under conditions of structural transformation and post-crisis recovery.
Authors: Victoria Kovalenko, Olena Serhieieva
Institution: Odessa National Economics University
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4413062220