Svіtlana Achkasova

Non-state pension funds play an important role in the development of the economy. The development of the system of non-state pension provision, which includes non-state pension funds, complies with the main aspects of the Ukraine – 2020 Sustainable Development Strategy. The importance of selecting investment areas for non-state pension funds results in the need to further explore and find ways to improve the investment process. The purpose of the article is to develop theoretical and methodological aspects of investing assets of non-state pension funds in bonds. The study object is the investment activity of non-state pension funds. The following methods are used: vertical and horizontal analysis, SWOT analysis, regression analysis, graphical and tabular methods. It is determined that effective investment of non-state pension funds’ assets provides an increase in the value of assets, which in turn enables participants of non-state pension funds to enhance the quality of life. Involving non-state pension funds in the stock market and their interaction with other entities in this market are illustrated by the investment in bonds example. The market of bonds in Ukraine for 2013-2017 has been analyzed and the tendency towards development has been determined. The possibilities and threats of investment of non-state pension funds’ assets in bonds are substantiated. The approach to determining the impact of factors on the government bond yields, in particular, bonds of domestic state loans and bonds of enterprises has been further developed. This approach, unlike the existing ones, provides for the use of regression analysis and takes into account changes in the environment according to factors (consumer price index and household income for government bonds, the number of enterprises and the discount rate of the National Bank of Ukraine for bonds of enterprises). That is of practical importance and will make it possible to improve the investment strategy of non-state pension fund assets in bonds.

The study aims at developing an approach to determining the bank connectivity level. This will contribute to implementing a risk-oriented approach to counteracting money laundering, terrorist financing and the proliferation of mass destruction weapons. The article proposes to assess the degree of bank connectivity and determine the impact of these circumstances on money laundering risk using banks from foreign banking groups, whose capital share in the Ukrainian banking system amounts to more than 40 percent. Using the resulting correlation dependencies, two-dimensional binary matrices were constructed, which became the basis for creating graphs of links between banks. The institutions under study are found to be predominantly connected in terms of their sets (varieties), since the average proportion of banks with close direct links is over half, and the non-connectivity coefficient for them is about 40%. Each surveyed bank, on average, has direct links with eight other banks and inverse links with four other banks. Considering banks as tops of the graph, one can assume that there is a hidden relationship between some banks. This approach allows calculating all existing relationships between banks to assess risk. Transforming the graph from non-oriented to oriented made it possible to identify and clearly demonstrate possible directions of links between the investigated financial institutions, which should be further verified to determine the risk of money laundering, terrorist financing, etc.

The high probability of risk transfer from banks to their counterparties in the field of non-state pension provision (pension account owners, non-state pension funds, insurance companies, asset management companies, etc.) determines the relevance of this study. The paper aims to develop a toolkit for identifying the compliance risk volatility for pension custodian banks based on causal modeling.
This toolkit contributes to: 1) tentative cognitive mapping of the causal relationship between the compliance risks of pension custodian banks in the field of financial monitoring and financial and reputational risks to assess their acceptability by stakeholders in non-state pension programs, and 2) impulse modeling.
The created toolkit is based on the performance data provided by Ukrainian banks, as well as on the reports of the National Bank of Ukraine. Apparently, an increase in penalty rates by 0.1% would reduce the compliance risks for banks by 0.03%, and the number of violations in financial monitoring (specifically the improper assessment/reassessment of customer risks) by 0.01%. In turn, the compliance risk volatility inherent in custodian banks affects the variability of their reputational and financial risks. Thus, reducing the compliance risks by 0.1% would improve the reputation of banks and increase their regulatory capital by 0.01%.
The study findings substantiate the use of the created toolkit to supplement the risk profile components for pension custodian banks, thereby demonstrating the potential volatility of their compliance risks and their consequences for banks and individual groups of their stakeholders.

Acknowledgment
The work is prepared and financed within the framework of the state budget research work No. 45/20202021 “Formation of a risk-oriented system of accumulative pension provision” (DR No. 0120U101508).