Stochastic Frontier Analysis and Wavelet Ideology in the Study of Emergence of Threats in the Financial Markets

Abstract

Financial markets are an important structural element of the economy. These markets make it possible to mobilize and reallocate financial resources. However, such a process is constantly under the threat of various risks. To prevent and minimize risks, it is necessary to use a comprehensive procedure for analyzing the conditions for occurrence of such risks. To this end, we examined the interrelationship of stochastic frontier analysis and wavelet ideology. We emphasize the link between technical efficiency and the possible occurrence of risks. For an advanced analysis of the conditions of occurrence of risk, we use the apparatus of the theory of wavelets. The results are given on the example of real data for the banking sector of the economy of Ukraine. The considered procedure can be used in infocommunication systems to ensure economic security.