PENSION FUNDS AS A GENERATOR OF DEVELOPMENT OF THE FINANCIAL MARKET

Abstract

The aim of the paper is to relate the credit rating of the country and the development of the financial market. At the same time, we will analyze the structure and size of pension funds and the development of the financial market by country. The research question is: "Does the size and structure of pension funds has any influence on the development of the financial market in the country?" The research deals with finding a response to the question of the dependence between the structure and size of pension funds on one side and the development of the financial market on the other. The subject of the research is an analysis of all pension funds, financial markets, credit rating and GDP in developed countries and in emerging markets. The obtained response to the research question may point to the direction of regulatory change that would stimulate or dissipate the development of pension funds in emerging markets. The methods used in this paper are the analysis and synthesis of previous research and theoretical findings, and an overview of case studies, to make conclusions drawn by the induction method. The contribution of the work is reflected in the fact that pension funds have been explained by their structure and size offering the development of the financial market in the country. The results show that pension funds can be significant support for state development, financing of local communities, but there are only weak determinations between the size and structure of the funds and the size of the economy and between the development of the financial market and the development of the market.