Assessment of the financial stability of the banking system of Ukraine in the conditions of external disturbance
Year: 2024
Type: article
Abstract: The financial stability of the banking system is a key factor that ensures the functioning of economic systems in conditions of external disturbances of various natures and prevents financial and economic crises of various scales. The article sets the following research tasks: to calculate the integral indicator of the financial stability of the banking system of Ukraine and evaluate its dynamics for the period 2020-2023; characterize the main methods and levers that ensured the preservation of the financial stability of the banking system in conditions of external disturbances. To assess the financial stability of the banking system, prudential standards for the banking system were used (without taking into account liquidity indicators due to their absence on the NBU website), in particular: H1 – the amount of regulatory capital; H2 – regulatory capital adequacy; H3 – adequacy of fixed capital; H7 – the maximum amount of credit risk per counterparty; H8 – high credit risk; H9 – the maximum amount of credit risk for transactions with persons related to the bank. The sample includes 45 observations during the period of the COVID-19 pandemic and Russia's full-scale war against Ukraine. The level of financial stability of the banking system is estimated using an integral indicator, which is calculated as the difference between a unit and a taxonomic indicator of the level of development of the system. The financial stability of Ukraine's banking system has been adversely affected to varying degrees by the COVID-19 pandemic and the full-scale invasion of Russia. During the COVID-19 pandemic and the imposed quarantine, the banking system of Ukraine demonstrated its resilience, and banks demonstrated their readiness to work, providing services in various formats. The reduction of the discount rate made it possible to support the economy of Ukraine during this period. In the conditions of a full-scale invasion of Russia, the NBU managed to maintain the stability of the financial system of Ukraine. The banking system was successfully restored sometime after the start of the full-scale war thanks to the introduction of the number of restrictions and limits by the National Bank of Ukraine with their subsequent relaxation, a significant increase in the discount rate in June 2022, and its subsequent reduction taking into account the financial situation in the country.
Authors: Nadiia Seliuchenko, Vitalii Radchenko
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4406293204