Entire Banking System Research Articles

A study of Islamic banking and finance for interest-free investors: A bibliometric analysis

Islamic banking is one of the fastest-growing sectors of the financial industry. Several works have been written in this field, but none attempt to learn the entire Islamic banking and financial system. Furthermore, the study could not locate any publications investigating the conceptual and intellectual foundations of this emerging field of inquiry. The current study uses bibliometric methodologies to assess the current state of Islamic banking, financial research, and the upcoming trends. For the people who choose interest-free investments, the current research examines a conceptual research context on Islamic banking and finance at various planning and decision-making stages. One thousand research studies appearing in scholarly journals between 2005 and 2023 were reviewed for the purpose. In order to examine the works on Islamic banking and finance, bibliometric techniques were used, including analysis of citation network, content, co-citation, keyword, and publishing trends. By suggesting thirteen clusters, to enhance research on Islamic banking and finance to help interest-free investors learn more, the goal of the research is to promote the body of knowledge. The field of Islamic banking and finance has grown from a young lot to a prominent teaching and research tool. Investigating and identifying current research trends in this area is crucial. As institutions and society are placing more emphasis on Islamic banking to raise individual citizens’ responsibilities in developing interest-free investing strategies, the findings are crucial to the community of interest-free financiers. Further research urges with the studies not restricted to a thousand researches only.

Is There Gap between Operating Performance of Systemically Important and Non-Systemically Important Banks in China?--Empirical Study based on Public Panel Data after Release of List

On September 22, 2023, the People’s Bank of China (PBOC) and the State Administration for Financial Regulation (SAFS) released the latest list of China Systemically Important Banks (D-SIBs). This study aims to analyze whether there is a gap in operational performance between (D-SIBs) and (D-SIBs) under additional regulation. The research method uses independent sample t-tests in statistics and the AHP_DEA model for financial bank operational performance. The research results indicate that there are differences in the operational performance of systemically important banks and non-systemically important banks in certain indicators. systemically important banks have a larger share in the entire banking system, and systemically important banks face more regulatory constraints than non-systemically important banks. This makes the cost of capital restructuring for systemically important banks higher, thereby reducing the speed of capital restructuring. However, further analysis indicates that there is no significant difference in operational performance and risk control between banks with systemic importance and nonsystemic influence. In view of this, systemically important banks must invest in technology and innovation to improve operational efficiency.

Road Ahead: Post Collapse of Punjab and Maharashtra Cooperative Bank

This case is about challenges faced by the depositors and the entire banking system following the collapse of the Punjab and Maharashtra Cooperative Bank. The Deposit Insurance and Credit Guarantee Corporation insured the bank deposits, and the earlier deposit insurance coverage was $74 million, which was increased to $370 million in the Union Budget of 2020. This increase was attributed to the collapse of the Punjab and Maharashtra Cooperative Bank, where 0.3 million people lost their money.

Risks of the Neobanks’ Activities in the Conditions of the Economy Digitalization

The operation of neobanks, as a new banking concept, is currently gaining great popularity. However, their activities are associated with specific risks that are not characteristic of classic banks. The inefficient risk management can harm not only the banks themselves but also customers as well as the entire banking system. The article aims to identify opportunities and threats in the resistance of neo-banks to risks against the background of companies' digitalization. The current study applied graphic, analytical research methods (determination of specific weight and structure fractions), parameterization methods using the matrix approach and linear functional dependence, and the method of strategic SWOT analysis. The application of advanced digital technologies enables neobanks to enhance their flexibility and ability to quickly adapt to changes in the market. The utilization of artificial intelligence allows neo-banks to supply their customers with personalized solutions and services, which can increase customer loyalty and satisfaction. However, neobanks face specific risks that can negatively affect their activities and entail grave problems both for the bank itself and for its customers. The growing use of digital technologies increases the risk of cyber-attacks and unauthorized access to customer financial data. Giv-en the above, neobanks should pay due attention to cyber security and ensure the highest protection of their customers’ data. Operation shortcomings, technical issues, and work breakdowns also present a considerable risk, as they can negatively affect the customer's trust and lead to the loss of business partners and reputation. Therefore, the success of neobanks depends on the ability to effectively manage these specific risks and ensure a high level of security for their financial services. The scientific novelty of the obtained results lies in the proposed parametric model for estimating the integrated neobanks’ risks drawing on the specified component risks. The research findings can be applied to elaborating a framework of project documents for promoting the development of neobanking while designing the ne-obanks’ risk management policy based on the proposed parametric risk estimation approach. The conducted study is promising in terms of opening up perspectives for future research, in particular as regards the effectiveness of neobanks’ risk management given the digitalization in the economic sphere.

ANTI-CRISIS MANAGEMENT OF BANK ACTIVITIES UNDER CONDITIONS OF INTERNAL THREATS

The development of banking meets crisis situations which due to social role and the specificity of functions requires a specific method of management as well as measures to prevent crises. The need to develop anti-crisis management occurs at the time of planning banking activities and relates to the specifics of the banking sector.
 In modern relations the unstable and changing economic situation is prone to constant changes, and as a rule, the inability to quickly adapt to these conditions creates a crisis situation in a bank which turns into a crisis state and becomes a risk for bank existence and requires the immediate implementation of measures for financial recovery .
 The article considers the concepts of crisis, banking crisis, anti-crisis banking management, provides a primary assessment of anti-crisis measures that are used in domestic banking practice in emergency situations, suggests directions for further work in anti-crisis management to prevent the consequences of a banking crisis at the current stage. It has been found that the banking crisis can be studied as a crisis of a separate banking institution or as a crisis of the entire banking system. The causes of crises have been clarified, the classification of which has been supplemented by a separate group of factors of emergency situations, since they require a more detailed study and the development of appropriate anti-crisis measures to overcome their consequences. It has been determined that anti-crisis management is carried out at different stages and with different goals: in normal conditions of bank functioning - with the aim of preventing a crisis, in crisis conditions - with the aim of overcoming its negative consequences.

Can CoCo-bonds mitigate systemic risk?

After the 2008 financial crisis, the idea of contingent convertible (CoCo) capital was revived as a means to stabilize individual banks, and hence the entire banking system. The purpose of this paper is to empirically test, whether CoCo-bonds indeed improve the stability of the banking system and reduce systemic risk. Using the broadly applied SRISK metric, we obtain contradicting results, which are based on the accounting of the CoCo-bond as debt or equity. This observation is problematic, as CoCo-bonds generally increase the loss-absorbing capacity of a bank. We remedy this shortcoming by proposing an adjustment to the original SRISK formula. Using empirical tests, we show that the undue disparity has been solved by our adjustment, and that CoCo-bonds reduce systemic risk, irrespective of their accounting. Our results are robust to different parametrizations and accounting standards, as well as issuance effects.

Pengaruh Good Corporate Governance Dan Budaya Organisasi Terhadap Pencegahan Fraud Pada PT Bank Central Asia Tbk

The Covid-19 pandemic has caused financial crises in almost all countries in the world. Based on the results of the ACFE survey, they found more forms of cheating during the pandemic. The banking industry has a very important role in supporting national economic development, for that it is important for banks to prevent fraud. If a bank fails to maintain credibility, it will have an impact on other similar banks and even the entire banking system, which in turn will reduce the financial stability of the country.
 The purpose of this study was to determine the effect of good corporate governance and organizational culture on fraud prevention at PT Bank Central Asia, Tbk. The author conducted research in three BCA Sub-Branch Offices, namely, Mayor Oking Citeureup, Pasar Cibinong and Graha Cibinong located in Bogor. This study used a sample of 42 respondents. The analytical method used to test the hypothesis is multiple linear regression processed with SPSS 25.
 The results show that good corporate governance has a positive effect on fraud prevention, organizational culture has a positive effect on fraud prevention, and good corporate governance and organizational culture simultaneously affect fraud prevention.
 
 Keywords: Good Corporate Governance, Organizational Culture and Fraud Prevention

Impact of Intangible Assets on Bank Performance in Emerging Capital Markets: Evidence from Russia

The article examines the impact of innovations on the performance of commercial banks. The size of intangible assets is used as a proxy for innovation, since most innovations in the banking sector, unlike those in industry, are intangible and include licenses, software, employees’ knowledge and experience, corporate culture, etc. Most researchers agree that an increase in efficiency and performance of financial companies is mainly underpinned by intangible assets, especially their unobservable part. The purpose of the study is to identify the relationship between innovation and financial performance of banks. Thirteen largest systemically important Russian banks of various forms of ownership in 2011-2020 were consideredin the course of the research. This choice stems from the fact that these banks account for over 2/3 of the entire banking system in terms of assets, and have their own specifics compared to other banks both within Russia and in the world.
 This study is limited by the fact that only large Russian banks were considered, while the specifics of medium and small banks, which have significantly fewer opportunities and are ready to take on higher risks, were not assessed. The scientific novelty lies in the fact that intangible assets are reflected in the work by a quantitative change used to assess the innovative activity of banks, for which an suitable approach is proposed. The results of empirical analysis demonstrate that the growth of intangible assets allows banks to increase the volume of both interest and commission income and slow down the rise of expenses, thereby ensuring profit growth. In turn, this stimulates increased liabilities, however, due to regulatory requirements, the share of equity remains almost unchanged at about 10% of the asset value. This trend indicates that even smaller banks can compete with larger ones by implementing innovation and building intangible assets.

Управление проектами на основе анализа бизнес-процессов и основных тенденций развития коммерческих банков

As a result of the changes that have affected to a large extent the entire banking system of the Russian Federation, banks were forced to rebuild the proven algorithms and automated management platforms. The reason for this is the import substitution of the software used as a result of the depar-ture of the main vendors of foreign automated systems that were used by Russian banks. At the same time, many banks faced a situation in which the accepted software from Russian developers was difficult to integrate into the management environment of their business processes. At the same time, each bank solves this problem in its own way, while software develop-ers bring new products to the market, often not taking into account the inter-ests of banks, which together leads to problems in adapting the proposed software to the required functionality. Without studying the specifics of the business processes of modern banking organizations, many solutions re-main unclaimed.
 Therefore, it is relevant to study business processes and trends in the de-velopment of commercial processes in the banking sector, which will allow modern developers to more clearly and clearly introduce systems to the market that help meet all the needs of financial organizations.
 This article presents the capabilities of Russian developers to integrate modern software into the business processes of the banking sector, which will, to a certain extent, solve the problems associated with the withdrawal of foreign vendors from the market. The study will determine the capabilities of banks and is aimed at ensuring that developers also take into account the interests and specifics of the commercial processes of the banking sec-tor, which together will allow building the most effective digital management platforms.

НАУКОВО-МЕТОДИЧНИЙ ПІДХІД ДО ОЦІНКИ ЯКОСТІ КРЕДИТНОГО МЕНЕДЖМЕНТУ БАНКУ НА ПРИКЛАДІ АТ «ПУМБ»

In the conditions of full-scale hostilities for the banking system of Ukraine, the issue of increasing the efficiency of managing the credit portfolio of each bank is urgent. The article highlights the concept of the quality of bank credit management and reveals that domestic scientists do not pay attention to its assessment. The paper proposes an approach to assessing the quality of the bank's credit management, based on the point-weight method recommended by foreign researchers. The essence of the method is that a number of parameters are expertly selected and the studied parameters are evaluated in comparison with measures to minimize them. By means of an expert survey, informative criteria are selected with the determination of their relative significance (weighting factors). Then they are summarized in a table (rating cards) and evaluated using different scales. The results are subject to processing taking into account the weighting factors and comparison in terms of the bank's activities, certain types of operations, services and other transactions. Within the framework of the point-weight method, four blocks were chosen for the criteria for assessing the quality of credit management: assessment of the quality of assets; profitability assessment; operational efficiency; strategic positioning. The proposed methodical approach makes it possible to detect deviations from the target parameters of the bank's credit activity, which is necessary when conducting internal diagnostics of the quality of asset management. The value of the methodology is its universality during comparative analysis, since the system of relative indicators can be applied to the study of any commercial banks, regardless of the volume of assets, capital, profit. To determine the effectiveness of the application of this methodology in banking practice, an assessment of the quality of credit management of the largest bank with domestic private capital – JSC "First Ukrainian International Bank" was carried out. The main factors inhibiting credit activity of JSC "PUMB" are identified and measures are given to improve the management of the credit portfolio of both the bank under study and the entire banking system of Ukraine.

Mevduat ve Katılım Bankalarının Güçlü ve Zayıf Yönleri ve Türkiye Ekonomisine Katkıları (2005-2020)

“İslami Finans” ya da “faizsiz bankacılık” olarak adlandırılan katılım bankaları, 1985’ten bu yana otuzbeş yıl içinde Türkiye ekonomisinin gelişmesinin bir parçası olmuştur. Muhafazakâr toplumun faiz hassasiyeti nedeniyle bankacılık sistemine dahil olmayan atıl fonları ekonomiye kazandırmıştır. Çalışmada katılım bankaları ile mevduat bankalarının aktif ve pasif yapılarındaki güçlü ve zayıf yönlerini incelendikten sonra, katılım bankalarının Türkiye ekonomisine katkıları analiz edilmiştir. Bu analiz yapılırken katılım bankalarının ilk defa bankacılık sistemine dahil olduğu 2005 yılından 2020 yılına kadarki geçen süreç seçilmiştir. Katılım bankalarının bankacılık sektörü içindeki payı analiz edilirken kredi portföylerinin yoğunlaştığı sektörleri incelenip, hem bankaların risk ve kârlılığını analizi yapılmış hem de mevduat bankaları ile karşılaştırması yapılmıştır. Aktif yapısına göre mevduat bankalarının tüm bankacılık sistemi içindeki payınınson on yılda %93-94 olması nedeniyle sektörü domino ettiği ve katılım bankalarının sektördeki payının %6-7 arasında kaldığı görülmüştür. Bankaların verdiği kredilere göre mevduat bankalarının hizmet, finans, imalat ve inşaat sektörüne yoğunlaştığı, katılım bankalarının hizmet, imalat ve inşaat sektörüne yoğunlaştığı görülmektedir. Analiz edilen veriler katılım bankalarının hem mevduat toplama hem de kredi dağıtma sistemiyle ilgili bir kısım sorunlar yaşadığını ortaya koymaktadır.

A Model Approach to Understanding Monetary Aggregates Growth in Sierra Leone and Implications for Policy Formulation

This study has adopted a model approach to developing an understanding of monetary aggregates (MA) growth in Sierra Leone, which certainly has implications for effective policy formulation by the central bank authority. In pursuance of this, we utilized the Autoregressive Moving Average (ARIMA) model with data spanning 2002M1 to 2021M12 to investigate the out-of-sample projection performance of the disaggregated components that makes up the MA for Sierra Leone – typically in this case Reserve Money (RMA), Currency-in-Circulation (CiC) and Reserve Money (RM). In our evidence from the empirical projection (covering the period 2022M1-2022M12), we observed that RM is projected to grow more than CiC over the observed period. Given RM being the operational target of the Bank of Sierra Leone, we believe that such an outcome is a promising indication particularly in ensuring the bank addresses its core mandates of monitoring price and financial stability. The increased scope of RM in the BSL system is a laudable outcome when it comes to meeting reserve requirements and also managing risks about price and financial stability. The study recommends that the BSL adopt innovation strategies concerned with FinTech and the emergence of the National Switch to effectively manage the MA portfolio in the entire banking system, which will also support the overall growth ambition of the central government.

ВДОСКОНАЛЕННЯ МЕХАНІЗМІВ УПРАВЛІННЯ ОПЕРАЦІЙНИМИ РИЗИКАМИ БАНКУ

The article examines the mechanisms and methods of operational risk management in Ukrainian banks. It is determined that operational risk is a complex type of banking risk, and the peculiarity of its implementation is that it is inherent in all banking processes, products, business lines and activities and has an unpredictable nature. It is proved that the improvement of operational risk management contributes to the sustainable functioning of banks and the stability of the entire banking system. The main principles of the bank's operational risk management system formation and functioning are determined, which include: objectivity and regularity of risk identification and assessment; timeliness of their detection and evaluation; complexity; structured management; proportionality; delimitation of control functions and operational activities; independence of individual governing bodies; confidentiality; transparency and efficiency. Given the complex and dynamic nature of operational risks, as well as the active digitalization of the banking business, it is recommended that operational risks include reputational risks, information risks and cyber risks. Based on the calculations, it is established that the impact of operational risks on the performance of domestic banks tends to increase, the leveling of which requires the development of new management mechanisms through the creation and effective operation of operational risk management. A system of measures to improve operational risk management based on the use of the «three lines of protection», which includes classification, identification, measurement, monitoring, control and reporting of operational risks, as well as assessment of economic and social consequences of risk events. The main methods of operational risk management are identified and it is proved that the key direction of their use should be preventive measures to avoid or minimize the economic consequences of risks, and coverage of losses arising from their implementation should be provided by specially formed reserves of internal capital. An indicative list of key indicators has been developed and approaches to characterizing operational risk events that can be used by domestic banks in practice to minimize the consequences of operational risks have been improved.

Non-Performing Assets in Public and Private Sector Banks in India: A Comparative Study

In emerging economies, banks are not only working as agents of financial intermediation but also having additional responsibilities to achieve social agenda of government. They are working as lubricant for the wheels of economy by providing financial help to the needy sectors. This financial help is providing by them via granting loans to all these sectors of economy. But the problem of rising non-performing assets (NPAs) is becoming hurdle in smooth functioning of banks which is also impacts on the growth and development of economy. The entire banking system in India is suffering from this problem of rising non-performing assets which is not good for bank’s progress. Because in case, if banks are not able to recover the amount lent to their borrowers, the level of their profits come down which will adversely affect the financial health of banks. This problem of increasing NPAs is not only faced by Public Sector Banks (PSBs) but also by the Private Sector Banks in India. This paper focuses on the level of non-performing assets in Public and Private sector Banks in India and also tries to give suggestions to reduce NPAs in banks.

The impact of liquidity on profitability – evidence of Vietnamese listed commercial banks

Profitability is a matter of concern for all economic organizations, including banks. The economic problem always poses for banks in maintaining growth and ensuring sustainable stability. Liquidity is always a concern of banks in maintaining profitability. The article aims to test the relationship between liquidity and profitability of Vietnamese listed banks. Data include 18 Vietnamese listed commercial banks for a period of 9 years from 2011 to 2019. The article uses the time series method with the ordinary least square. The results show that liquidity has a positive relationship with the profitability of listed banks including return on assets, return on equity, and net interest margin. As for net interest margin, the liquidity ratio of loans to deposit plus short-term borrowings and short-term bills payable has the opposite effect. To contribute to the stable and sustainable growth of the banking system, the article proposes the policies for the Vietnamese banking system by fully implementing the regulations on liquidity based on the Bank for International Settlements and should forecast the financial developments in the region and the world to have flexible responses to avoid uncertainties, as well as the need to form and maintain funds to timely support for liquidity in the entire banking system.

Credit Risk Management and the Financial Performance of Domiciled Banks in Sierra Leone: An Empirical Analysis

This study assesses the nexus between credit risks and performance of commercial banks in Sierra Leone using data collected from the Bank of Sierra Leone (BSL) on relevant Financial Soundness Indicators like ROA, Bank Liquidity, NPL, and Credit over the 2008Q1-2018Q4 period. Evidence from (unbalanced) panel data estimation within the fixed effects model shows that the fragility of the banking system stems from high NPLs. We further provide evidence that a low productive base in the domestic economy influences the state of high NPLs in the banking system. The study revealed the need for collaboration between the research arm of monetary policy and financial stability departments in a bid to monitor risk in the financial system, which the entire banking system experienced around 2015-2017 that resulted in stringent measures adopted by the BSL to rescue the two state–own commercial banks. Equally, vigilant approaches should be explored by the BSL authority that leads to (positive) structural changes in banks’ approach to improving efficiency while at the same time minimizing continued risks to high NPLs and many more. The study finally recommends that ROA and ROE be adopted as independent indicators by the regulatory authorities to effectively monitor performances across the banking industry, as this would help monitor unexpected shocks in the banking system. 

Функціонування банківської системи України: проблеми та перспективи

The article is aimed at analyzing the state of the banking system and forming perspective directions for its development. The main attention in the article is paid to the study of the peculiarities in the functioning of the banking system of Ukraine, its problems and prospects. The carried out analysis showed that the banking system of Ukraine has a sufficient reserve of financial sustainability. The pandemic of 2019 and the war with Russia negatively affected the entire banking system of Ukraine, the number of domestic banking institutions is rapidly decreasing. At the same time, the banking system in the context of war operates smoothly, the level of liquidity of domestic banks remains at a sufficient level due to the presence of significant reserves of highly liquid assets and a slight outflow of banking deposits of the population and business. The dominant tendency in the banking system of Ukraine is the unprecedented crisis caused by the war started by Russia, as result of which significant losses are expected in the banking sector of our State, which is already characterized by high credit risk, large amounts of deductions to reserves and poor quality of loan portfolios and their depreciation. A number of promising directions as to operation of the banking system of Ukraine are proposed, in particular, banks need to apply loan holidays on a weighted basis, carefully assess the financial condition of borrowers, accurately restructure debts, develop cybersecurity, and the NBU should weaken regulatory requirements in case of violation of capital or liquidity standards by banks, stimulate the introduction of various new technologies for various banking payments. Credit risk is the main indicator of the effective activity of domestic banks, which as of today has its negative impact on the entire banking system. The NBU needs to continue to implement anti-crisis measures to increase the profitability, solvency and liquidity of Ukrainian banks.

L'indépendance de la BDL et les déterminants de la crise économique au Liban

Cet article vise à identifier le concept d'indépendance de la Banque Centrale qui s'est propagé dans les années quatre-vingt avec la tendance à séparer la politique budgétaire de la politique monétaire pour permettre à cette dernière de lutter avec crédibilité et efficacité pour son objectif de stabilité monétaire et maitrise de l'inflation. Toutefois, la crise financière de 2008 a remis en question l'exigence de l'indépendance de la Banque Centrale par des Politiques Monétaires Non Conventionnelles (PMNC). Au regard de l'écroulement actuel de l'économie libanaise, il serait intéressant de se pencher sur le cas de Banque du Liban (BDL), dotée d'une certaine indépendance statutaire mais souffrant d'une faible indépendance fonctionnelle. En se référant au modèle de Jácome (2001) adéquat pour les économies dollarisées, nous démontrons que la BDL manque d'indépendance effective qui se traduit par son acceptation de se plier aux demandes continues du Trésor Public de contribuer au financement d'une dette publique croissante dont une partie en devises étrangères. La BDL maintient un ancrage rigide du taux de change dans une économie fortement dollarisée et implique l'ensemble du système bancaire dans des PMNC qu'elle nomme « ingénieries financières » et qui contribuent à l'écroulement multidimensionnel actuel (budgétaire, monétaire et bancaire).

Peril or Promise—How the SME Banking Sector Will Perform in 2022 and beyond? Do We See an Overreliance on Recovery?

The study takes a specific look at the microstructure of banking lending to SMEs and the latent trials in maintaining a better balance between the loan demand and supply after the COVID-19 pandemic to upkeep the overall economic goals. The global “war” on the COVID-19 pandemic and related economic waves indeed have led to the worldwide recession. The COVID-19 crisis becomes the most extensive systemic-risk unification the world has ever comprehended in the commercial sense. More actions are needed to avoid falling these economies into life-support despite government initiatives regarding new regulations and stimulus packages. Unfortunately, the smallest business segment struggles and fails to claim essential funding through internal and external sources due to inherent weaknesses and poor business architecture. Historically, the SME funding gap was one of the critical areas of discussion and research. Before the current situation, accessing financial services, crucial for SMEs’ growth, severely constrained many economies. However, the problem has further deteriorated. The prolonged low-interest environment, high competition, and compressed interest margins made many banks under-priced SME risk, particularly after the previous financial crisis. Against this backdrop, the predominant SME lenders experience high NPL ratios, adversely affecting the entire banking system’s soundness and lending to the real economy.

BANKING RISKS IN UKRAINE AND METHODS OF THEIR PREVENTION

The banking system of Ukraine is the main component of the financial market, the proper functioning of each element of the banking system has a positive impact on the development of the economy as a whole. In today’s difficult conditions, the instability of global and national financial markets, the problem of ensuring financial adaptability and stability of banks is of great importance. Unfortunately, the activity of banks is impossible without risks. Compared to other types of business activities, the banking sector is characterized by the highest level of risk, which is due to the specifics of banking operations. In recent years, Ukraine’s banking system has reached a stage of "cleansing". The political and economic crisis, which began in late 2013, worsened the financial condition of domestic banks. Both individual banks and the entire banking system of Ukraine today operate in difficult conditions with high risks. Banking is negatively affected by the low level of the resource base, the predominance of short liabilities, low incomes, and the shadow sector of the economy. Due to the unsatisfactory condition of borrowers, the banking system requires the creation of reserves, which in the absence of relatively stable sources of resources makes it difficult to form the resource base of commercial banks. Despite the large number of works of scientists, in our opinion, the problem of improving methods of preventing banking risks remains insufficiently disclosed, which is why the chosen topic is relevant and needs further research. Therefore, one of the most important tasks facing any bank in the world is to identify, assess, monitor, control and manage the bank’s risks. Such tasks should be solved by the banking system of Ukraine for the strategic development of the country and the improvement of all sectors of the economy.