BANKING RISKS IN UKRAINE AND METHODS OF THEIR PREVENTION

Abstract

The banking system of Ukraine is the main component of the financial market, the proper functioning of each element of the banking system has a positive impact on the development of the economy as a whole. In today’s difficult conditions, the instability of global and national financial markets, the problem of ensuring financial adaptability and stability of banks is of great importance. Unfortunately, the activity of banks is impossible without risks. Compared to other types of business activities, the banking sector is characterized by the highest level of risk, which is due to the specifics of banking operations. In recent years, Ukraine’s banking system has reached a stage of "cleansing". The political and economic crisis, which began in late 2013, worsened the financial condition of domestic banks. Both individual banks and the entire banking system of Ukraine today operate in difficult conditions with high risks. Banking is negatively affected by the low level of the resource base, the predominance of short liabilities, low incomes, and the shadow sector of the economy. Due to the unsatisfactory condition of borrowers, the banking system requires the creation of reserves, which in the absence of relatively stable sources of resources makes it difficult to form the resource base of commercial banks. Despite the large number of works of scientists, in our opinion, the problem of improving methods of preventing banking risks remains insufficiently disclosed, which is why the chosen topic is relevant and needs further research. Therefore, one of the most important tasks facing any bank in the world is to identify, assess, monitor, control and manage the bank’s risks. Such tasks should be solved by the banking system of Ukraine for the strategic development of the country and the improvement of all sectors of the economy.