FINANCIAL MARKET INSTITUTIONS COMPETITIVENESS AND FINANCIAL CONVERGENCE

Problem statement. Whether insurance companies, pension funds, banks as parts of financial conglomerates (FC) are more competitive inside the group than outside it being individual entities. Authors consider Russian financial market as a field of empirical study. Goal is to reveal the nature of the financial convergence as a mechanism of competitiveness for the parts of FC. Methods of the article are based on the "Performance-Conduct-Structure" (PCS) idea known as Boone "effective competition" indicator applied for insurance financial conglomerate member competitiveness evaluation. Objectives. 1) To reveal the process of competition on financial markets using mechanism of financial convergence. 2) To give definition of financial conglomerates as a basic institutional and organizational form of financial convergence. 3) To implement Boone "effective competition" indicator for empirical study of the financial convergence as the mechanism of the competitiveness increase for the Russian biggest financial-insurance groups. Results and findings. The results and novelty of the study are (1) refined definitions of "financial convergence" and "financial conglomerate". (2) Boone indicator is used to estimate financial convergence, which is a tool to improve competitiveness through competition between insurance organizations. (3) Assessment for competitiveness of Russian insurance companies as part of financial groups and as independent companies. (4) proposed hypothesis is confirmed only partly. Financial Convergence as a mechanism to enhance the competitiveness of its members presupposes the solution of a number of issues related to its institutional and organizational for empirical study of leading Russian insurance financial conglomerates competitiveness based on the proposed method of Boone "effective competition" indicator evaluation and on the alternative method of coefficient variation of the insurance undertaking financial result-s activity calculation. Analyzing some basic indicators of the annual financial statements of these entities for the period 2009-2015 the study argues that insurance companies being the members of financial conglomerate have higher competitiveness than individual non-member-firms.