MODERN APPROACHES TO REGULATION AND STABILIZATION OF THE STOCK MARKET

Abstract

The stock market constitutes a fundamental component of the contemporary financial system, as it serves as a mechanism for the accumulation and redistribution of capital, thereby underpinning investment growth and long-term economic development. It fulfills essential functions such as attracting financial resources, directing them efficiently into the productive sector, and maintaining equilibrium between supply and demand for financial instruments. Nevertheless, its instability can generate systemic risks, trigger financial crises, and adversely affect the socio-economic security of the state. Hence, analyzing the patterns and mechanisms through which the stock market influences the resilience of the financial system becomes particularly significant in the context of globalization challenges, integration processes, and heightened financial turbulence. This article examines the interrelationship between stock market development and the level of financial stability, highlighting its key functions in fostering investment activity, establishing the fair market value of securities, increasing the transparency of economic processes, and strengthening the competitiveness of the national economy. The study identifies positive factors driving market development, including growing investor confidence, improvements in financial infrastructure, and the advancement of innovative instruments, alongside negative influences such as macroeconomic instability, speculative activities, information risks, and shortcomings in regulatory mechanisms. The findings emphasize that effective regulation and the development of a robust institutional environment are crucial prerequisites for mitigating crisis risks and ensuring sustainable market performance. Special attention is given to the importance of implementing modern regulatory technologies and digital solutions capable of enhancing transparency, manageability, and reliability of market processes. It is concluded that the synergy of institutional reforms, the adoption of innovative financial instruments, and the exercise of strategic state supervision provide a solid foundation for ensuring the long-term stability of the stock market and reinforcing its role in promoting the country’s economic development.