Abstract
Ukrainian banking institutions conduct their activity under the influence of various risks, which create critical situations for them. In this context, banks should pay more attention to their own security. The article analyzes the theoretical approaches to the concept of “banking security”, examines the level of banking security as a component of the financial and economic security of the state, and determines the ways to improve it. Banking security was analyzed based on the data of the National Bank of Ukraine and other banks that are part of the banking system of the country.The current state of the banking system shows a decrease in the security since 2014 to the “danger zone”. This is facilitated by a great number of problem loans and foreign capital in the authorized capital of banks; the predominance of short-term lending over long-term one; continued unprofitableness and low liquidity of bank assets. Banking security was the guarantor of achieving financial security of the state. Therefore, the article outlines directions for improving the operation of banking institutions and the banking system as a whole, which will allow to improve banking security in the short term. This is, first of all, the legislative consolidation of the creditor rights protection, the expansion of the lending process, including in foreign currency, with the predomi-nance of long-term loans, the banks’ work in the direction of increasing their assets profitability, optimizing administrative costs, developing and using the latest informa¬tion technology to ensure the effective operation and information security of banks.
Highlights
The banking system is one of the important components of a modern market economy
Under the growing openness of the state economies and their consistent integration into the world economy, ensuring the banking system security is a prerequisite for the normal functioning of the country’s economy, an important area for guaranteeing economic stability. This is due to the influence of both the external environment, which today is characterized by deepening of the financial crisis, and internal environment, in particular, the strengthening of competition and consolidation of banking business
The influence of the internal environment leads to the threats that impede the implementing strategic directions for the development of banks in terms of their profitability and risk minimization
Summary
The banking system is one of the important components of a modern market economy. Due to their uniqueness, banks are often the engine of economic growth in the country. According to Baranovskyi, the uniqueness of the banks lies in the fact that they are monetary and credit institutions simultaneously (including the central bank and other deposit institutes), financial intermediaries (including insurance companies, pension and investment funds) and intermediaries of the securities market (including professional participants) They are leading players on foreign exchange markets and in international settlements Under the growing openness of the state economies and their consistent integration into the world economy, ensuring the banking system security is a prerequisite for the normal functioning of the country’s economy, an important area for guaranteeing economic stability This is due to the influence of both the external environment, which today is characterized by deepening of the financial crisis, and internal environment, in particular, the strengthening of competition and consolidation of banking business. The influence of the internal environment leads to the threats that impede the implementing strategic directions for the development of banks in terms of their profitability and risk minimization
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