Abstract
The development of the financial market and the transformation of the banking sector create a need for diagnostics of its financial security. This study is aimed at determining the level of the Ukrainian banking sector financial security in the event of decapitalization of the national economy. The paper uses multicomponent and behavioral analysis methods. The empirical study is based on Ukrainian data for 37 indicators by three components (for multicomponent analysis) and 23 indicators (for behavioral analysis). The study presents an improved algorithm for monitoring the level of Ukrainian banking sector’s financial security based on the calculation of the integral indicator. Only the system of “Financial results” indicators as the most significant component has relative independence from the other two components (“Financial stability” and “Macroeconomic stability”). According to assessments, in 2008–2017 Ukrainian banking sector’s financial security was 0,485-0,539; and in 2018 it became 0,626. The behavioral analysis of the partial integral indicator of the “Financial stability” component with the withdrawn assets located in offshore jurisdictions revealed the causal relation of the negative impact of capital outflow on the financial stability of the banking sector. This study has a practical value for determining the level of the banking sector financial security.
Highlights
Systemic regulation of the banking sector is one of the most important tasks for Ukraine in the context of the need to overcome further crisis phenomena in the economy
This study considers the argument on the Economic Security Level (2013), is subject to feasibility of using these calculations in the rating discussion
The advantage of the set of proposed indicators is to consider the conditions of divergence of the financial sector over the real sector
Summary
Systemic regulation of the banking sector is one of the most important tasks for Ukraine in the context of the need to overcome further crisis phenomena in the economy. In the context of the said divergence, banks are oriented towards implementing macroprudential and microprudential policy norms and lack the tools to solve their own tactical and strategic tasks. Under such divergence, banks are not aimed at maintaining the banking sector’s financial stability as a whole. Banks are not aimed at maintaining the banking sector’s financial stability as a whole
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