THE RISK OF OPERATIONAL ACTIVITIES OF THE BANKING SECTOR UNDER THE CONDITIONS OF A FULL-SCALE WAR IN UKRAINE

Abstract

Today, operational activity and operational risks in the conditions of war are recognized as important factors in the stability of the functioning of Ukrainian banks. As a result of the full-scale war, Ukrainian banks suffered losses from operational risk: business interruptions, loss of assets due to the seizure of territories, lack of income, etc.
 The article examines: how banking institutions coped with operational challenges that arose in the first months of full-scale war; functioning of the most important business processes and communication with the data processing center of the National Bank of Ukraine even in the event of a long-term power outage; losses of banks from realization of operational risk events; losses for banks in the event of a complete loss of property, which is currently beyond their control, due to banks reducing their branch networks.
 Analyzed to recording operational risk events in databases were analyzed, in particular, it was determined that about ten small financial institutions reflect all expenses related to Russia's military aggression in one event, however, most banks still distinguish events by type.
 Based on the conducted research, it was concluded that some banks underestimate losses from operational risk events or do not record operational risk events related to war at all. There are very different approaches to the classification and assessment of the level of losses of financial institutions that have recorded operational risk events in their databases. At the same time, we are aware that the deep crisis caused by the war will have far-reaching consequences. Therefore, the main challenges are still ahead and the NBU is closely monitoring the operational activities and operational risks of the banking sector.