Domestic Banking System Research Articles

Capitalization of Ukrainian systemically important banks of military aggression of the rf

Introduction. Systemically important banks (SIB) play an important role in stability of the do­mestic banking and financial system since their activities significantly affect the country’s finan­cial system and the economy as a whole. Problem. Domestic banking system constantly functions in a mode of stress and uncertainty In conditions of war, therefore the National Bank of Ukraine pays special attention to the activities of systemically important institutions. Ensuring the proper functioning of SIB depends on the level of their capitalization, which is why the capitalization of systemically important banks is an extremely urgent issue today. The aim of the article is to determine the ability of SIB to meet capital adequacy require­ments as a factor of ensuring the stability and reliability of the domestic banking system and its macroeconomic stress resistance under martial law. Methods. Methods of theoretical genera­lization, analysis and synthesis, grouping, sys­tem approach were used in the paper. Results. The value of the capital standards of domestic SIB during the period of martial law was investigated, a comparative analysis of ca­pitalization indicators of SIB of Ukraine with their normative and forecast values under basic and adverse macroeconomic scenarios was car­ried out according to the results of the NBU stress testing. Banks that show signs of an unfa­vorable macroeconomic scenario have been iden­tified, and recommendations have been develo­ped regarding the need to take additional measures to increase the stress resistance of banks. Conclusions. In conditions of war, the SIB of Ukraine fulfills the requirements regarding the target values of the capital standards and has a sufficient margin of safety due to the appropriate level of capitalization, although the implemen­ta­tion of the basic macroeconomic scenario tur­ned out to be impossible, which caused lower than forecast capital indicators. Therefore, the regu­la­tor should pay additional attention to those banks that demonstrate negative trends for the implementation of an unfavorable macroeconomic scenario at this stage and prepare a set of mea­sures for their recapitalization in advance.

CURRENT ACTIVITIES OF TRANSNATIONAL BANKS IN THE GLOBAL ECONOMY

The article defines modern trends of transnationalization in the international banking sphere. The prerequisites for the formation and development of globalization processes in the financial and banking sphere are considered: economic factors, technological and international legal factors. The general definition of a transnational bank is substantiated, the essence of which can be considered in the context of quantitative and qualitative aspects of its definition. A general definition of a transnational bank is provided as a bank that carries out operations in more than one country. The most characteristic trends in the development of transnationalization of the international banking business are outlined, which include the universalization of bank activity, the growth of competition in the banking sector, the liberalization of banking operations, and the growth of innovative activity of banks. The negative consequences of the development of international banking operations are also determined. The characteristic trends of transnationalization in the banking sphere were studied and the leading transnational banks were selected by the level of market capitalization. The peculiarities of the development of the domestic banking system, which is considered as an attractive host area for transnationalization processes, are evaluated. The influence of transnational banks on the economy of the host country and its banking system is considered from the point of view of the consequences of financial liberalization of the world economy as a whole and the development of the domestic financial sector. Identified obstacles on the way to the formation of Ukrainian transnational structures: the instability of the economic and political situation in the state; underdevelopment of the legislative framework in matters of the status and activities of transnational corporations; strong competition from existing global multinational corporations; lack of an appropriate innovation base that could compete with the technologies of foreign multinational corporations; relatively low level of management; high «tinization» of the economy; high level of inflation, etc. The main reasons that caused the changes in the banking sector in modern globalization conditions are proven: the unification of the activities of the real sector of the economy and the financial system of the countries of the world, convergence of the rules for regulating internal and external operations; formation of a network of branches of transnational companies; transformation of the international capital market into an independent factor in the development of the world economy; increase in the share of international operations of banks in the total volume of operations. On the basis of the conducted analysis, suggestions are provided regarding the further development of the activities of transnational banks in the world economy.

Pengaruh Electronic Banking Terhadap Kinerja Perusahaan Perbankan Yang Terdaftar Di Bursa Efek Indonesia Periode 2019-2021

The purpose of this study is to examine the impact of e-banking (ATM and mobile banking) on ​​the performance of Indonesian Stock Exchange listed companies in the banking sector from 2019 to 2021. Today, the rapid development of information technology affects many aspects of life, including banking. One of the challenges for the domestic banking industry is protecting customers amid increasingly complex and dynamic requirements regarding both the services and products offered. Therefore, modern and mature information technology is required to support the service. Researchers brought up the topic as a study in line with the increasing number of transactions that people in Indonesia make via e-banking. This shows an increasing trend every year. Although the survey is associative, the survey population is IDX-listed banking companies for the period 2019-2021. Sampling is performed using a targeted sampling technique. The sample used in this study included 38 banks with 3 years of follow-up. Data analysis was performed using a statistical application, namely multiple linear regression using SPSS. Tests have shown that ATMs have a positive impact on bank performance, as ATM distribution is currently distributed in different locations and they are easy to use. This has created a general perception that ATMs are ubiquitous and can transact indefinitely, and customer growth has an impact on financial performance. Second, M-banking affects the bank's financial performance. Many banks have adopted the use of M-banking because it is driven by the level of investment. In addition, the use of M-banking in general, many customers immediately take advantage of the possibilities of their mobile banking.

Review of the banking sector of Ukraine during martial law

Russia's full-scale attack on Ukraine provoked an increase in internal and external risks, both for the country's economy as a whole and for the financial sector in particular. This has become a key challenge for our state, because it is the stable operation of the financial system that provides the necessary resources for victory. An important component of the financial sector is the domestic banking system, which with the beginning of hostilities on the territory of Ukraine has experienced significant shocks and functions in a regime of stress and uncertainty. At the same time, banks continue their activities, trying to fulfill all their obligations and comply with the norms established by the NBU. However, it is obvious that certain transformations are taking place in the banking sector. The banking system is forced to quickly adapt to functioning in the conditions of martial law, acting as a reliable pillar of the financial defense of Ukraine The paper discusses the features of the banking sector of Ukraine and the functioning of domestic banks under martial law. The changes that have taken place in the structure of the banking sector and banking infrastructure during martial law are determined. The key tendencies of the banking market during the war have been studied. The attention is focused on the issues of managing the credit risks of banks in the conditions of stress and uncertainty caused by the war and their ability to normalize their financial performance in the foreseeable future and take stabilization measures. The key principles and instruments of financial support for banks by the regulator have been identified. That is, the main elements of the policy of regulatory easing of the NBU regarding the activities of domestic banks in wartime conditions are outlined.

CURRENT PROBLEMS OF THE BANKING SYSTEM AND METHODS OF SOLVING THEM IN A SPECIAL SITUATION

The banking sector is one of the most important components of the financial sector. Starting on February 24, 2022, both businesses and ordinary citizens felt their dependence on hostilities, as the payment system was already under a heavy load in the first few days, which almost led to its collapse. The banking sector has received many challenges, the main of which are: a decrease in income relative to expenses, an increase in the share of non-performing loans, mass migration of people abroad, and the loss of part of the staff. The NBU and other subjects of the financial sphere create all the conditions for serving the economic and banking interests of the population and ensuring a high level of competitiveness of the banking sector. Looking at the situation today, the domestic banking system has undergone and is undergoing significant upheavals due to the fact that it has to "work" in conditions of uncertainty, but still banks fulfill their obligations and comply with regulations. However, we can also observe certain transformational processes, such as: implementation of the Power Banking project (a perimeter built on the basis of regular bank branches that will provide financial services to clients in conditions of a long-term lack of power supply); uninterrupted operation of the contact centers of the National Bank is organized; new functions have been added to the BankID system, which enables financial sector entities to solve their problems a little easier and faster, etc. The article is devoted to highlighting the main problems of the functioning of the banking system of Ukraine in the conditions of a special state. The importance of the study lies in the need for urgent implementation of measures that will contribute to reducing the risks of the financial system and banks as a whole to a possible minimum.

Effect of reporting with IFRSS on the quality of information disclosure in the financial statements: A study of selected deposit money banks in Nigeria with international recognition

This paper examines the effect of reporting with International Financial Reporting Standards (IFRSs) on the quality of information disclosure in financial statements. To achieve the objective of the paper, two hypotheses were tested in line with the objectives of the study. The survey research design was adopted, and the population of 55 respondents gotten from eight (8) banks. But for the purpose of the analysis 48 sample size was used which constitutes the numbers of respondents from the eight (8) banks’ top management staff that are involved in the preparation of financial statements. The instrument used for data collection was titled “IFRSs Adoption and Quality of Information Disclosure (IFRSAQID)”. Based on the findings of the study, there is a strong and significant relationship between the quality of information due to the adoption of IFRS 16, and reporting in a common language due to the fact that the adoption improved the disclosure of more information. Based on this, it was recommended that banks should be encouraged to adhere to the requirements IFRSs in the recognition, measurement, and disclosure of financial information to reduce information asymmetry. Also, regulatory bodies should ensure strict compliance and defaulters should be penalized to reduce incessant financial scandals that have caused investors to lose a substantial amount of their wealth to reckless reporting in the past. The paper is very apt considering the information asymmetry that has existed for decades due to the adoption of IAS 17 replaced by IFRS 16, and using banks with international recognition because their operation is beyond the domestic banking system.

Banking system of Ukraine in war

Introduction. With the beginning of hos­tilities on the territory of Ukraine on February 2022, the domestic banking system has under­gone considerable turmoil and it functions in a stress mode and uncertainty. At the same time, banks continue their activities, try to fulfill all their obligations and adhere to regulations. However, certain transformations take place in the banking sector. The banking system quickly adjusts to functioning under martial law. Problem. The specified circumstances led to changes in the banking infrastructure, influen­ced the current trends of the banking market and accelerated the pace of digitization of banking processes. The aim of the article is to study the func­tioning of the domestic banking system under martial law. Methods. Methods of theoretical generali­zation, analysis and synthesis, grouping, and system approach were used in the paper. Results. The features of the domestic banking system and the functioning of banks under martial law were considered. The changes that took place in the structure of the banking sector and banking infrastructure under martial law were determined. The key trends of the banking market during the period of martial law were studied. The authors identified digitization features of the banks under current conditions and defined the key principles and instruments of financial support of the banks by the regulator. Conclusions. The country’s banking system operates stable and ensures continuous work of financial institutions through the coordinated actions of the regulator and the banks under martial law. There are no significant changes in the structure of the banking market, but the infrastructure of banks has been transformed under martial law. In addition, the current trends of the banking market demonstrate the presence of obvious difficulties in the work of banks due to the influence of martial law. Despite the war risks, the banks have a sufficiently high level of liquidity, which allows ensuring the further continuous implementation of non-cash payments and other obligations.

CURRENT TRENDS IN THE DEVELOPMENT OF THE BANKING SYSTEM OF UKRAINE

Abstract. The article examines the peculiarities of the banking system of Ukraine and analyzes foreign experience in this area. The results of the study show that the domestic banking system is less capitalized compared to developed countries and has a smaller reserve of liquidity. It was determined that by using advanced global trends in monetary policy and the implementation of banking activity, it is possible to improve its condition. A study of the state of the banking system of Ukraine in modern conditions was conducted and its key trends were identified. We note the decrease in the number of banks and the decrease in their profitability with the introduction of martial law due to the increase in risks and the deterioration of the socio-economic situation of the country. However, in general, the banking system has withstood the serious challenges of the modern stage: banks operate and lend while maintaining liquidity. It is justified that in today's conditions, an important task is to support the activities of banking institutions. In order to ensure the smooth operation of banks and the electronic payment system, the NBU took timely steps that allowed this period to pass with moderate losses for the financial sector. Thus, the NBU reduced the requirements for the formation of reserves and refinanced banks in order to increase the liquidity of the banking system of Ukraine. The government's interest expense compensation programs also have a positive impact on credit recovery and the state of the banking system. The article formulates the key problems of the banking system of Ukraine and defines the ways of its development, the use of which will contribute to the optimization of its activity and the development of the financial system as a whole.

FINANCIAL MARKET OF UKRAINE: STRUCTURE AND DEVELOPMENT TRENDS

The purpose of this work is to study the current state and trends in the financial market of Ukraine. Methodology. The following methods of scientific research were used: analysis and synthesis; theoretical generalization; abstraction and comparison; systematic approach. Results. The article reports that the financial market of Ukraine is in the process of formation, which is due to the uneven spatial dynamics of financial capital in the course of market reforms; heterogeneity of economic and financial space of the country; fundamental asymmetry between regions in terms of financial capacity; localization of financial institutional infrastructure; level of investment attractiveness, etc. It was found that the main problem of the financial market of modern Ukraine is the inability to provide an effective redistribution of financial resources needed to meet the challenges of modernizing the domestic economy and create an innovative impetus to the reproductive processes. Practical implications. To improve Ukraine's financial sector and boost economic growth, it is necessary to create an effective mechanism for improving banks' lending policies. To develop bank lending and create financial stability in this period it is necessary to make banking services of higher quality to improve their competitiveness; to set maximum interest rates on loans within the framework of state acts and monitor their implementation; to encourage commercial banks to lend to innovative projects; to increase the size of main assets of state banks, increase their number and strengthen their role in the financial and credit market of Ukraine, etc. Value/originality. It has been researched that the structure of the financial market is dominated by the number of companies engaged in the provision of loans, loans, financial leasing, the provision of guarantees; carrying out factoring, currency exchange and money transfer operations. For the development of bank lending it is necessary to improve banking services to improve their competitiveness; set maximum interest rates on loans within state acts and monitor their implementation; stimulate lending by commercial banks to innovative projects; increase capital resources of state banks, increase their number and strengthen their role in the financial and credit market of Ukraine, etc. These measures will contribute to the recovery of the national economy and increase the level of financial efficiency of the domestic banking system.

ТРАНСФОРМАЦІЯ ЄВРОПЕЙСЬКОГО ДОСВІДУ ЩОДО БАНКІВСЬКОГО КРЕДИТУВАННЯ АГРАРНОГО СЕКТОРА УКРАЇНИ

. The banking sector is the most active participant in Ukraine’s integration process into the EU among other sectors of the economy, as 45% of banking institutions as of the beginning of 2022 have foreign investors in their equity capital structure. The purpose of the article is to study the European experience in lending to the agricultural sector and its implementation in the domestic banking system. In the present conditions, bank lending is an effective source of long-term financing of the economy around the world and the basis for its recovery from the crisis. Russia’s full-scale war against Ukraine has led to a deep crisis that will have far-reaching consequences for the financial sector. However, the banking system successfully resists the challenges of the war. In the process of European integration of the banking system, the cost of credit resources has significantly decreased. Thus, the average interest rates on loans ranged from 20.5% in 2019 to 8.8% in 2021, i.e. there was a significant reduction in the interest rate on loans, which met the requirements of the European integration of the banking system. Instead, in the first half of 2022, the cost of hryvnia loans to business entities grew to 17.9% per annum, the reason for this growth is a significant increase in credit risk due to the full-scale invasion of Russia. The banking system of Ukraine, led by the NBU, is trying to support Ukrainian producers and businesses as a whole. Thus, as of 01.07.2022, the agricultural industry received the largest share of loans, namely 53%, since it is a priority for the Ukrainian economy and guarantees food security to many countries of the world. Due to the limited budget financing of agricultural producers in 2022, bank lending remains one of the main sources of financing for current projects of agricultural enterprises. France and Poland are prominent examples of efficient banking lending programs for the agricultural sector, in particular organic production. The practice of bank lending in the EU countries allows us to make a conclusion about the comprehensive support of agricultural producers from the state and banking institutions, this deserves attention and introduction to the activities of Ukrainian banks. The transformation of European experience in agricultural lending will enable Ukrainian banks to acquire the latest skills in introducing various banking lending programs not only for agricultural producers but also for other economic entities. Attracting European experience into the domestic banking ecosystem will expand the range of banking services for agricultural producers, reduce interest rates on loans, guarantee the availability of credit resources, and provide credit insurance.

ГРОШОВО-КРЕДИТНА ПОЛІТИКА НБУ: ТЕНДЕНЦІЇ ТА ЗМІНИ В ГРОШОВІЙ МАСІ

From the point of view of real and in the last two years, mainly negative in their consequences, changes in our social production, the main directions of the monetary policy developed and implemented by the National Bank of Ukraine are considered. Measures taken by the central bank to implement monetary policy are analyzed in connection with the government's actions to stimulate economic development and overcome the negative consequences that arose during the pandemic and significant changes in the global market conditions. Attention is focused on the analysis of the steps taken by the main regulator in order to counter the rapid inflationary process, which especially intensified in 2021 and the threat of significant rates of which remains in the current year. The factors that led to significant changes in the national currency, manifested in a significant weakening of its purchasing power, were identified. Among them, some attention is paid to the analysis of the impact of the pandemic on the economy of Ukraine. The fact of slow and insufficient response of the government to the current situation in the country is stated. The named external factor was also strengthened by the political factor, which found its expression in the insufficiently high level of professionalism of a significant part of high-ranking state officials who came to power on the wave of pre-election populism. At the same time, both external and internal factors that had a significant impact on price growth in Ukraine were considered. It is stated that the anti-inflationary actions of the central bank can be successful only with the restructuring of the domestic economy. Some attention is paid to the actions of the government, which are associated with intentions to strengthen the investment process and which are largely implemented through the banking system. The main factors of the weakening of the hryvnia exchange rate against the US dollar are revealed and possible directions for strengthening the national currency are identified. Analyzed the main activities of the central bank to address the current problems of the domestic banking system.

Forecasting the instability of Polish banks

The paper presents a formalised procedure of the identification of financial stability EWI (Early Warning Indicators) for the Polish banking sector, in which a two-step procedure was applied. First, the author used a logit model to estimate of the biggest Polish banks’ probabilities of default (PDs). Next, the calculated individual banks’ PDs were used to prepare aggregated domestic banking system stability. In the last step, employing a set of multivariate Markov-switching models with distributed lags (MMSM-DL), the author applied this measure to identify EWI from the candidate macro, private and public debt, banking sector, financial markets and property prices indicators. The best performing EWI were selected with application of area under the receiver operating characteristic (AUROC) metrics and compared with an output of a popular logistic regression (LR) model. To the best author’s knowledge, this article presents for the first time a fully formalised analytical framework based on the MMSM-DL approach that combines microprudential and macroprudential data for the Polish banks financial stability EWI identification. Moreover, the survey supports the hypothesis that the Polish banking sector is stable with use of a formalised econometric procedure.

Modern financial and economic crises and the stability of the financial and banking system of Ukraine

Factors, problems and risks are analyzed and systematized, in particular, technical-technological and innovation backwardness, peculiarities of economic cycles in economic systems of countries at different stages of development, as well as due to increasing competitiveness of some of them in the globalized world. crisis. It is shown that the situation worsens when the world economy grows, and against its background, imbalances in the global financial system are growing and speculative capital is spreading. It is revealed that the first global crisis of 2008–2010 was provoked by the uncontrolled spread of mortgage loans in the US real estate markets and the transfer of these processes to other countries, resulting in "financial bubbles", a market crash and a chain reaction involving others. markets. Emphasis is placed on the fact that when Ukraine's economy was in a state of permanent crisis, the domestic banking system withstood all domestic economic, financial, currency and other changes, as well as external turbulence, which provoked the strengthening of negative trends. It is established that the second financial and economic crisis of 2014–2016 is largely due to internal problems: much lower technological structure (third-fourth compared to fifth-sixth in economically developed countries), significant lag of Ukrainian industry in terms of innovation from industry EU countries, a high level of depreciation of fixed assets, much higher resource intensity and lower productivity, unrealistic in a few years to carry out innovative modernization of machine-building industries for the production of means of production. An acute threat has been revealed that the unlimited increase in speculative capital has exacerbated structural imbalances between the real and financial sectors. The main negative consequences of the crisis for the financial and banking system are systematized: they include more than three devaluations of the hryvnia, liquidation of more than a hundred banks and privatization of the largest of them, Privatbank, closure of several thousand banking branches and large–scale unemployment. It is confirmed that the third financial and economic crisis of 2020–2021 has a natural origin – it was caused by the pandemic COVID-19 caused by the coronavirus SARS-CoV, and its consequences. It is established that the corona crisis has provoked various negative effects on the work of industry and social services, has caused significant damage to all countries and the vast majority of the world's population. It is shown that Ukraine proved to be more resilient to these troubles and the pre-crisis revival began in the second quarter of this year. It is substantiated that the implementation of macroprudential policy measures aimed at preventing the accumulation and implementation of systemic risks in the financial sector will help increase the stability of the financial and banking system, properly perform its main functions – financial intermediation and payments – and crisis management. It is shown that timely and effective implementation of macroprudential instruments will increase the stability of the national economy and reduce GDP volatility. Key words: financial and economic crisis, stability of the financial and banking system, economic cycle, market turbulence, inflation, capital movements, financial markets.

METHODOLOGICAL APPROACH TO FORMATION OF A SYSTEM OF ECONOMIC AND LEGAL SUPPORT OF STABILITY OF THE BANKING SYSTEM

Abstract. The heart of any market economy is its circulatory system. The complex of credit and banking institutions that serve their viability of structures (infrastructural elements), is a full-fledged banking system of the country. Modern dynamic processes of globalization of financial markets due to the acceleration of the free movement of capital, in addition to a positive impact on the development of national financial systems, create conditions for the spread of crisis trends, including contributing to the manifestation of the chain of «infection effect» of banking systems in the international financial space. A system of economic and legal support for the financial stability of the banking system has been developed. The feasibility of creating and achieving the effectiveness of which in modern conditions is due to the need to reboot the domestic banking system to solve existing internal financial problems and transform it in accordance with the European-oriented vector of development of the country’s economy. The existing system provides for the financial stability of the banking system at two levels: at the macro level — the banking system as an object with systemic properties; micro-level — banks as structural elements of the banking system. The study of the features of the formation of a system of economic and legal support for the financial stability of the banking system. The main task was to optimize the main elements of the system of economic and legal support for the financial stability of the banking system. The main goal of the study is to form a system of economic and legal support for the financial stability of the banking system. A methodology for structuring system elements was applied. Building an information model allows you to structure the elements of the system of economic and legal support for the financial stability of the banking system, see their relationship, highlight the main and secondary ones. Keywords: economic and legal support, stability, financial stability, banking system, banks. JEL Classification G20, G21, E58 Formulas: 3; fig.: 1; tabl.: 2; bibl.: 15.

Tourism-Related Loans as a Driver of a Small Island Economy: A Case of Northern Cyprus

Although the literature on the contribution of tourism to economic expansion vis-à-vis the tourism-led growth hypothesis has been widely explored, so far, limited attention has been paid to the specificity of the role of tourism-related loans or financial inducement in economic growth. This paper examines the short-run and long-run relationships between bank loan disbursements to the tourism sector and economic growth in Northern Cyprus. We structurally derive empirical equations for co-integration and error-correction models by extending the original Solow growth model, applying a cointegration approach that is strengthened by the autoregressive distributed lag and Granger causality approaches to reveal important findings. The empirical findings suggest unidirectional causality from loans disbursed to the tourism sector to economic growth in Northern Cyprus for the period under study. Additionally, we show that tourism-related loans and human and technological advancement all spur economic growth in the short- and long-run. These findings’ main policy implication is that long-term complementary policies in the domestic banking system can increase the access to financial sources for tourism enterprises and, consequently, promote tourism-led economic growth, especially in small tourism-dependent economies where capital sources are scarce.

International banking and financial fragility: the role of regulation in Brazil and Mexico, 1967–1982

The shortcomings and potential dangers of international financial flows for the health and stability of domestic banking systems in developing countries have been copiously discussed over the last decades. While the importance of capital controls and regulation as determining factors has been widely emphasised, the extent to which these policies work in episodes of financial crisis is still a matter of debate. This article examines the relationship between supervisory frameworks and banking fragility in Mexico and Brazil in the wake of the international debt crisis of 1982. It shows that the model of international banking intermediation that evolved out of the stringent capital mobility system in Brazil was considerably less vulnerable to crisis than in Mexico, which had a more lightly regulated regime. These findings provide insights into historical debates about the implications of prudential regulation and capital controls for the development and expansion of foreign finance, and whether the risks underlying international banking are necessarily inherent in the process of financial globalisation.

Topical Issues of Improvement of Banking System And Legislation In Uzbekistan

Banks and banking systems are among the most important mechanisms in the development of a country's economy and the creation of favourable conditions for doing business. The internationalization of the banking business poses new challenges for the scientific community to find optimal solutions that reduce banking risks, strengthen national banking systems and improve banking technologies. Accordingly, today it is important to strengthen the banking system and its legal regulation in Uzbekistan. In this regard, it is important to analyse the development of the domestic banking system, including in terms of its legal support. This article investigates the banking system, bank services and their regulation in Uzbekistan, where the role of foreign banks is not sufficiently regulated and is not attractive for foreign banks. This study identifies the problems of further improvement and liberalization of banking legislation. The focus is on the lack of banking practices and legislation, and on the introduction of new foreign banks in the domestic banking services market. However, the development of the country’s economy and the involvement of foreign direct investments are impossible without a strong banking services market. It is noted that one of the important conditions for the development of a banking system in Uzbekistan is the formation of an effective mechanism of state regulation and improvement of legislation directed at creating favourable conditions for foreign banks to enter Uzbekistan’s domestic market. The article examines the implementation of international best practices in state regulation of the banking system and banking services that will serve to modernize the system of banking services, attract foreign investment in the banking sector, and harmonize banking legislation.

Foreign Currency Intermediation: Systemic Risk and Macroprudential Regulation

Despite the progress made on the empirical front, normative analyses are still lacking when it comes to foreign currency intermediation (partial dollarization of the domestic banking system) and the ways to address its systemic risks implications. In this paper, we make a comprehensive analysis of the liquidity and the foreign exchange (FX) systemic risks implied by foreign currency intermediation. We explain the trade-off between the positive effect of foreign currency intermediation on growth in tranquil times and its negative effect in terms of financial fragility. We review the narrative and econometric country studies that have been done so far to assess the effectiveness of FX-related macroprudential measures. Through the results of past studies and a comparison of the experiences of Latin American and transition European economies, we show the advantages of administrative macroprudential measures over price-related measures in dealing with liquidity and FX systemic risks. We show that neutralizing those systemic risks is possible without aiming at directly limiting or banning foreign currency intermediation (i.e., dedollarizing). We argue that dedollarization is a more ambitious target that must be justified by the other inconveniences of foreign currency intermediation, and we stress that sound monetary management should be a prerequisite to dedollarization.

Governor Ciampi and the “Ambrosiano Case”: International Banking Supervision and Monetary Policy

Following bank failures in 1974, notably in Germany (Bankhaus Herstatt of Cologne on June 16) and the US (Franklin National Bank of New York on October 8), the Central Bank Governors of the G10 countries decided to set up a Committee at the BIS in Basel to improve quality and enhance the effectiveness of banking supervision. The Eurodollar market and the rise of offshore financial centers had concurred to create an increasingly interlinked web of international banking transactions. The system of national supervision of domestic banking system had to be completed by incisive and coordinated action at international level, also to cope with the vulnerability to frauds and interactions with organized crime. The Basel Committee issued in December 1975 the Concordat, which provided a framework for international banking supervision and made a distinction between solvency and liquidity. It was within this emerging frame of reference that the Bank of Italy and the G10 Governors dealt with the crisis of the Banco Ambrosiano Group: the crisis had started in 1977 and was concluded with the formal liquidation on August 6 1982. The measures taken by Governor Ciampi and Treasury Minister Andreatta, the dialectical interactions with the Basel Committee, the G10 Governors (banking supervision and monetary policy) and the IOR in the Vatican City are analized and discussed in this article. In preparing the paper the author could benefit from the extremely competent support of the Historical Archives of the Bank of Italy and the access to documents only recently accessible for public consultation. As is shown, the action undertaken by Governor Ciampi and by the Bank of Italy in the Ambrosiano case contributed to the evolution of banking supervision as regards both the revision of the Concordat and, thereafter, the development of a system of mandatory risk-weighted capital ratios. A parallel lasting lesson is that capital adequacy requirements must be complemented by targeted effective supervisory guidance and oversight of corporate governance for banking firms to prevent, insofar as possible, inappropriate and illegal practices, while ensuring accountability of shareholders and top managers for their wrongdoings.

Influence of the Average per Capita Income on Credit and Savings Behavior of the Population in Russia

The successful functioning of the national economy is largely determined by the stability of its banking system. The article is aimed at studying the features of credit and savings behavior of the population based on the reporting data of the Central Bank of Russia and Rosstat for the period 01.02.2011 – 01.08.2020. It is proposed to characterize the features of such behavior based on an analysis of the relationship between the volumes of deposit and credit transactions of the population. The theoretical part of the article considers various aspects of determining the behavioral approach to savings: bank contribution, as a form of realization of investments; conservation as a form of reaction to instability; appeal to the bank as part of the fight against the economic crisis, etc. In the practical part of the study, using comparison and graphical analysis methods, 3 periods of transformation of these types of population behavior were identified based on a change in the relationship between the volume of debt on loans and the volume of deposits. Absolute parameters of marginal sizes of fluctuations of indicators of deposit and credit transactions for use in prognostic purposes were evaluated. The value of the deposit volume shift was calculated, which ensured a reduction in the size of the negative balance of deposit and loan operations in the domestic banking system during the crisis of 2015–2016, which contributed to the stability of this system. The analysis of the compared indicators showed the comparability of the dynamics of the change in the ratio of deposits and debt on loans with the dynamics of the average per capita monetary income of the population. The study revealed a stable increase in the volume of deposits of the population in most monthly indicators, which allows us to expect the stability of the banking system of Russia in terms of a balanced subsystem of deposit and credit operations.