The effect of uncertainty on financial risk, savings, confidence index and financial markets of countries: an application on BRICS-T countries

The aim of this study is to examine the effects of uncertainty on some macroeconomic variables and financial systems of BRICS countries and Turkey. In a period of increasing uncertainty in the world, understanding the relationships between financial risk, savings trends, confidence indices and financial markets becomes important. The factor that makes financial markets interconnected is the phenomenon of globalization. In the globalizing world, the environment of uncertainty affects both investors and companies. The uncertainty that arises in the globalizing world causes the economic results of the world countries to emerge in a volatile manner and negatively affects the confidence of investors or companies. In such an environment, the process of uncertainty causes major problems, but these negative consequences have always existed, and perhaps will continue to exist in the future. The main thing is to manage the uncertainty process well. If the uncertainty process can be managed well, problems can be reduced or even eliminated. In this study, the impact of uncertainty on countries' financial risk, savings, confidence indices and financial markets was tried to be measured with the BRICS-Turkey example. The period of the study is 2008-2023 and the data was used annually. Pedroni and Kao Cointegration Test is the method used in this study; FMOLS and DOLS Panel Coefficient Estimators were used. As a result of cointegration analysis, it is seen that there is a cointegrated relationship between the variables in the long run. According to FMOLS coefficient estimator; It is concluded that the world uncertainty index for countries has a negative effect on Stock Exchange and Savings variables, and an positive effect on Domestic Credit to the Private Sector/GDP, Credit Risk Premium (CDS) and exchange rate variables. DOLS coefficient estimator results and FMOLS give similar results. According to these findings; It is concluded that the world uncertainty index for countries has a reverse effect on Stock Exchange and Savings variables, and an equal effect on Domestic Credit to the Private Sector/GDP, Credit Risk Premium (CDS) and exchange rate variables.