Monitoring System for Regional Financial Security

Abstract

A monitoring system for regional financial security based on a key set of indicators can be used to timely and promptly identify, analyse and assess security threats at the meso-level. The study hypothesises that the implementation of the proposed monitoring mechanism will improve detection, analysis and diagnosis of threats to financial security across regions. This can be achieved through the synthesis of an indicative approach, ranking method, minimax approach and normalisation function. Additionally, the system can be used to more accurately determine the security zone and assess the influence of various factors on each indicator. The article presents a methodology for assessing regional financial security based on a set of indicators characterising regional financial systems and their budget, investment, foreign economic components. Statistics from the Federal State Statistics Service, Bank of Russia, Treasury of Russia, customs and tax authorities were analysed. The indicative approach, ranking method, minimax approach, and normalisation function were synthesised to transform original data into a hundred-point scale, determine threshold values and identify the most significant threats to financial security in the field of foreign economic activity, monetary policy, financial stability and enterprise performance. The testing of the proposed methodology in Kirov oblast using ten indicators revealed several threats to the region’s financial security. Dynamics of indicators of Kirov oblast were compared with those of other regions of the Volga Federal District. The developed approach to organising financial security monitoring and recommended tools can be used by public and administrative authorities for identifying, analysing, assessing and predicting threats to financial security of meso-level systems. Future studies can increase the number of indicators for examining financial security.