Abstract
This article discusses the latest methodological recommendations of the Basel Committee on Banking Supervision developed in response to the effects of the global financial crisis and known as Basel III. The purpose of the study is to explore scientific approaches to justifying bank regulation as a key condition for overcoming the economic crisis and improving financial sustainability. The object of research is Basel III instruments that will be implemented in the bank regulatory policy of Ukraine. The systematic approach and systemic thinking used in the article allow one to substantiate the expediency of Ukrainian banking institutions’ governance based on the risk-oriented approach and to determine the strategy of bank supervision for the next 1-3 years. The study evaluates the results of stress testing of the largest banks in Ukraine. Thus, the results confirm that the banking sector in Ukraine is sufficiently capitalized in the absence of macroeconomic shocks, but in case of a crisis, some of these banks are not protected. Therefore, the article formulates recommendations for improving the regulation of these banks, the phased implementation of Basel III, the application of new principles, standards, tools and methods, corporate governance and risk management in Ukrainian banks.
Highlights
Over the past five years, the situation in the Ukrainian banking sector has changed dramatically
This article discusses the latest methodological recommendations of the Basel Committee on Banking Supervision developed in response to the effects of the global financial crisis and known as Basel III
The systematic approach and systemic thinking used in the article allow one to substantiate the expediency of Ukrainian banking institutions’ governance based on the riskoriented approach and to determine the strategy of bank supervision for the 1-3 years
Summary
Over the past five years, the situation in the Ukrainian banking sector has changed dramatically. The public confidence in banking institutions has shaken This requires rethinking of the regulation mechanism of the banking sector in Ukraine, which was unable to withstand financial risks, and the development of a new, more effective mechanism for increasing banking stability. It is necessary to analyze the main Basel III innovations to determine the possibility of their adaptation to the features of the domestic banking sector, to determine their possible impact on Ukrainian banking institutions, to develop a plan for the introduction of new principles, standards and methods in Ukraine. The banking sector to withstand financial stress; due to the dramatic changes that have improve corporate governance and, in particurecently taken place in the Ukrainian banking sec- lar, risk management system; to expand the list of tor, there is a need to improve banking regulation public information on banks’ activities, which will through the lens of Basel III recommendations. Become continuous and is implemented simultaneously by all banks through assessing the size of
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