BANKING SYSTEM OF UKRAINE: STATUS AND DEVELOPMENT TRENDS

Abstract

s an important component of the financial market, the banking system of Ukraine provides conditions for the effective functioning of the entire economic system of the country. Traditionally, the task of the banking system is the concentration of monetary resources with their subsequent redistribution among business entities, households, and industries. By fulfilling this task, the banking system actually contributes to the economic development of the state.In 2022, with the beginning of the war, the national banking system was faced simultaneously with problems of a general economic internal nature caused by the war: a reduction in production and income from the export of industrial and agricultural products, devaluation of the national currency, an increase in security risks, mass migration of the population and problems of a global nature -this is a slowdown in the development of the world economy. In these conditions, the National Bank of Ukraine, as the regulator of the money market, was forced to switch to a strict model of monetary policy, the goal of which was, first of all, to maintain the rate of inflation and exchange rate stability, and the main "recipes" for improving the money market were to increase the discount rate and mandatory reserve norms for commercial banks. The transition to a restrictive monetary policy is always a test for banks, but. the timely application of restrictive measures made it possible to maintain control over the currency market, over price dynamics, and give a positive forecast for economic growth.Activity in the conditions of war and economic uncertainty became a reality for the banking system and a basis for the formation of further development trends.In the medium-term perspective, the main trends in the development of the banking sector include the NBU's continued strict monetary policy and the strengthening of market incentives for banks to attract long-term hryvnia deposits from individuals; dominance of credit risks in banking; significant investments by commercial banks in high-yield certificates of the NBU and Domestic state loan bonds with the aim of increasing interest income; gradual decrease in liquidity in the banking sector; slowing of inflation as a result of the reduction of security factors; the return of banks to their pre-war business models with the simultaneous search for new forms of lending and the formation of an effective anti-crisis model of bank regulation