Dear Saad Baloch, Thank you very much for asking this very important question.

Question:

Is stock market a true representative of economy of any country? I s there any connection between the both?

this is a very important issue that requires scientific research.

The topic is important. Nice and informative query and discussion. Because the topic is very important so I still read the answers, I follow the interesting discussion. I believe that scientific research in this area should be developed. Best wishes

I answer an interesting question:

In the long-term period, this correlation is significant. On the other hand, however, the importance of state intervention implemented through monetary policy pursued by the central banking and through the budgetary policy pursued by the ministerial bodies appointed for this purpose within the state administration is growing. The central banks in many countries, including the Federal Reserve Bank and the European Central Bank after the outbreak of the global financial crisis in the autumn of 2008, have applied particularly significant interventionist monetary policy. I researched this issue and published scientific publications on this topic.

I invite you to the discussion

The above discussion inspired me to the following considerations:

Is the importance of the psychology of financial markets and behavioral economics in the securities markets falling after the global financial crisis?

Are the investors operating in securities markets more cautious in making investment decisions after the global financial crisis, or are they more thoroughly analyzing the investment risk of investing in capital markets?

Has any of you conducted research aimed at identifying possible changes in the significance of the psychology of financial markets and behavioral economics in the capital markets, including securities markets after the global financial crisis of 2008?

If research shows that the importance of the psychology of financial markets and behavioral economics on the capital markets is decreasing, what is it mainly determined?

Is this the result of post-crisis higher awareness of investment risk among investors, or also changes in the structure of dominant segments of investors operating on capital markets, or is it also the result of the increase in the number of transactions conducted by computerized transaction systems?

Please reply. I invite you to the discussion

The study of the functioning of securities markets is particularly important in the context of the analysis of the effective functioning of modern economies. It is particularly important to limit the systemic investment risk and strengthen the instruments of financial supervisors to reduce the likelihood of further global financial crises.

I invite you to the discussion

In addition, I note the interesting discussion inspired me to the following considerations: Will further mergers and acquisitions in the investment banking sector increase the credit systemic risk in the economies? The process of credit risk management improvement is implemented mainly at the level of a specific commercial bank. Central and supervisory institutions, which include mainly central banking and banking supervision institutions, may affect some aspects of this process, correct possible excessive levels of systemic credit risk, especially when a specific bank reliably implements prudential procedures in the scope of lending or in an aggravating situation the quality of the loan portfolio caused by the downturn in the domestic and possibly global economy. Before the emergence of the global financial crisis in autumn 2008, there was an unwritten rule in some financial circles that a large banking entity could not fail. The declaration of bankruptcy by jeen from the largest investment banks Lehman Brothers, from which the bankruptcy will begin the global financial crisis, questioned this type of opinion referring to entities of the financial system. Since 2008, in the period of the past decade, another spectacular major mergers and acquisitions took place in the sector of commercial financial institutions, including some of the largest banks globally. If the supervisory and central bodies of financial systems consent to this type of transaction, is it possible to assume that central banking and banking supervision institutions of particular countries are of the opinion that this is irrelevant to the potential increase in systemic credit risk and thus the risk of emergence in the future, the next and perhaps even more negative effects of the global financial crisis? What if one of the largest banking entities on the global scale in the future would announce a permanent loss of liquidity? Do the central banks that are accepting this state already have prepared prudential and rescue instruments, including, for example, counted in many billion USD or Euro rescue stabilization funds in the event of the emergence of the next global financial crisis? These financial stabilization funds are reportedly already prepared, but can a potentially larger global financial crisis than the previous one in 2008 be effectively controlled thanks in principle only to these stabilization funds? In addition, if central banking suggests to commercial banks, including investment banks operating on capital markets, that in the event of a financial crisis will help to eliminate the potential risk of bankruptcy of many financial system entities, how these statements translate into an approach to improving the credit risk management process and to comply with banking procedures regarding lending and securities operations and compliance with good business practices? In my opinion, such unwritten statements can increase the moral risk and reduce the pressure and need to improve credit risk management processes. On the other hand, the merger of one of the largest commercial finance sector entities and the emergence through mergers and acquisitions of larger banks may generate an increase in systemic credit risk, the negative consequences of which in the event of another financial crisis will be more difficult to control by central banking rescue tools, if the financial reserves shaping the issue of the security of the financial system in the economy maintained by certain central banks will not grow at such a rapid pace as the increase in the balance sheet total of merging and emerging growing banking entities. In view of the above, after the past decade from the global financial crisis of 2008, the question still remains: Will further mergers and acquisitions in the investment banking sector increase the credit systemic risk in the economies? Please, answer, comments. I invite you to the discussion.

The issue of the impact of monetary policy on the stability of financial systems in the context of the global financial crisis is described in the publication:

https://www.researchgate.net/publication/320060288_ACTIVATING_INTERVENTIONIST_MONETARY_POLICY_OF_THE_EUROPEAN_CENTRAL_BANK_IN_THE_CONTEXT_OF_THE_SECURITY_OF_THE_EUROPEAN_FINANCIAL_SYSTEM

I invite you to discussion and cooperation. Greetings

Will artificial intelligence combined with the analysis of data collected in Big Data database systems be used in automated forecasting of valuations of securities and other assets on capital markets?

In the background of the plot of the film "Transcendence" from 2014, directed by Wally Pfister, the topic of analysis is analyzed by a computerized system combining artificial intelligence with human consciousness loaded into a computerized system of artificial intelligence connected to Internet resources and using the resources on its own.

This independence also means access to various databases, including internal Big Data database databases belonging to certain corporations, including listed companies that are issuers of securities.

The artificial intelligence connected to the Internet, according to a specific strategy, also independently conducts transactions on the market of valuable securities.

In addition, it establishes statrtsets offering innovative technologies, which in a short time become large capital companies characterized by a high capitalization of exchange quotations of shares of these companies listed on stock exchanges.

The above-presented film "Transcendence" presented above picture of integration of artificial intelligence, human consciousness and Internet resources is a picture of typical science fiction.

However, on the other hand, the function of this image is also to inspire to discuss the potential possibilities of integration of the above-mentioned elements into one system of autonomous and working in the Internet resources artificial intelligence, in addition also containing some human feelings.

The above image from the movie "Transcendence" became an inspiration to formulate the following question below.

The mentioned motif from the movie "Transcendence" looks impressive and convincing in this film mainly because it has a full spectrum of innovation.

The use of new, innovative instruments for forecasting specific economic categories usually works until these innovative instruments continue to be innovative, ie until they are disseminated to the majority of participants in specific markets.

In view of the above, I am asking you to answer the following question: Will artificial intelligence combined with the analysis of data collected in the Big Data database systems be used in automated forecasting of valuations of securities and other assets on capital markets?

Please, answer, comments. I invite you to the discussion.