Financial Stability Of Banking System Research Articles

ECONOMIC ESSENCE OF THE FINANCIAL STABILITY OF THE BANKING SYSTEM

Introduction. The article examines the essence of financial stability and stability of the banking system in order to analyze and understand them. The main approaches to interpreting the concept of “financial stability” were reviewed and systematized. Based on the analysis of the interpretation of the category “financial stability” by foreign and domestic scientists, two main approaches are distinguished. A forward approach aimed at determining financial stability and an inverse approach aimed at determining financial stability through the absence of financial instability. The author's definition of the concept of “financial stability” is proposed. The author's definition of the concept of “financial stability of the banking system” in accordance with the functions of the banking system is considered and formulated. The relationship between financial stability and financial sustainability, particularly in the context of the banking system, is considered and their analysis is carried out. The purpose of the article is to analyze the main approaches to defining the concepts of “financial stability” and “financial stability of the banking system”, as well as to establish the key approaches of scientists to their interpretation. Methods. In solving the tasks, general scientific and special cognitive methods were used. The theoretical and methodological basis of the research was the economic works of foreign and domestic researchers and specialists, who shed light on the issue of financial stability management and forecasting the functioning of banking systems. The following methods were used in the research process: theoretical generalization, the possibilities of which were used to generalize modern scientific theoretical approaches to defining the concepts of “financial stability” and “financial stability of the banking system”; system approach and comparative analysis – to identify connections between financial stability and financial sustainability; graphic method – for visual display of research results; method of generalization, which made it possible to formulate the results of the study. Results. An analysis of the definitions of the concept of “financial stability” by foreign and domestic scientists was carried out, which made it possible to distinguish two approaches to its interpretation. A definition of the concept of “financial stability” is proposed. A mutual and consistent connection between the financial stability of the banking system, economic development and state security was noted. The absence of a single, clear interpretation of the concept of “financial stability of the banking system” was established. An analysis of the relationship between financial stability and financial sustainability was carried out. An interpretation of the concept of “financial stability of the banking system” is proposed. Perspectives. Financial stability of the real sector of the economy cannot be achieved without the financial stability of the domestic banking system. Therefore, the important issue of developing a new scientific and methodological approach to assessing the financial stability of the banking system arises. Indicators of assessing the financial stability of the banking system are a promising direction for further scientific research.

Financial stability of the banking system of Ukraine in the conditions of war

For more than a year now, Ukraine has been fighting back against Russia's full-scale aggression, defending its independence. The war took tens of thousands of human lives, mutilated human destinies, and thousands of square kilometers of Ukrainian land. The financial stability of the banking system is the most critical aspect of Ukraine's economic stability and national security, especially in military conflicts. War poses several complex challenges to banks, requiring them to manage risks and respond to adverse economic changes effectively. As a result, there is a need to assess the financial stability of the banking system in the face of a full-scale invasion. The purpose of the article is to study and analyze the impact of the military conflict on the financial stability of the banking system of Ukraine. Based on today's observations, it is developing specific strategies and recommendations for ensuring financial stability in the context of military conflict. Results. The article examines the problem of financial stability of the banking system of Ukraine in wartime conditions. The study focuses on identifying key aspects and challenges that arise before banks in military conflicts. The role of banks in ensuring the country's economic stability and national security in the conditions of war is analyzed. Namely, attention is focused on the profitability of the banking sector and the factors that affect it. A parallel was drawn between the NBU discount rate and certificates of deposit. The level of liquidity of the banking sector is characterized. In the article, much attention is paid to the characteristics and assessment of the role of state banks. In conditions of high military risks and significant uncertainty, these banks actively support lending, mainly state-owned enterprises, keep records for government payments, and provide access to banking services through a vast network of branches. They continue to hold the leadership in terms of the size of the network and the attractiveness of public funds, provide loans, and are the most active participants in the state mortgage lending program "eOsel". Measures to improve the financial stability of the banking system of Ukraine during the war are recommended, considering the aspects listed above. To ensure financial stability in the challenging conditions of wartime, concerted efforts, and close coordination of actions of all participants of the financial market are needed: banks, non-bank financial institutions, the National Bank, and other market regulators, as well as adequate support of state authorities. The study suggested that banks optimize the costs of maintaining their networks while ensuring the maximum availability of their services, and state-owned banks update their strategies to address the main weaknesses of their operations and prepare for privatization after the end of hostilities. Despite the difficulties, it is essential to note that the experience and support of international organizations can play a huge role in strengthening the financial stability of Ukraine's banking system in wartime conditions. Joint efforts and professional response of financial institutions are essential factors that will contribute to ensuring financial stability in the country, even during significant military conflicts. Keywords: financial stability, martial law, banking system, instruments for ensuring financial stability.

Stress testing the banking systems: Approach of Ukraine

Scientific-methodical approaches to stress testing Ukrainian banking system in the context of the banks groups: state-owned, owned by Russia, foreign, private Ukrainian are analyzed in this study. It identifies an influence of the different groups in regulate the level of financial stability of the banking system. Highest level of financial stability of Ukrainian banking system was found to be connected with activity foreign banks from Eastern Europe and Central Asia exclaims banks owned by Russia and Ukraine.
 The proposed study, by using NBU stress testing scenario and by impacting of the devaluation of the national currency, presents the improved methodology for determining the level of financial stability of banking groups in terms of crisis increase exchange rate. This study was conducted by way of review of the data on bank core capital and regulatory capital, real and nominal GDP, consumer price index and reducing the rate of UAH to EUR.

ASSESSING THE IMPACT OF OPERATIONAL RISK MANAGEMENT ON FINANCIAL PERFORMANCE OF SELECTED MAINSTREAM COMMERCIAL BANKS IN CAMEROON

The Basel Committee for Bank Supervision (BCBS) is aimed at enhancing financial stability of banking system by providing quality supervision and regulatory frameworks for global banking operations. The committee provides recommendations on capital risk, market risk, and operational risk; with the objective of ensuring that financial institutions have adequate capital reserved to absorb unpredicted losses. It is on this premise that this study seeks to analysis the impact of operational risk management strategies on financial performance of selected mainstream commercial banks in Cameroon. A quantitative case study design was used and supported with the philosophical underpins of objectivism ontology and positivism epistemology. Data was primarily sourced using structured questionnaires from two hundred and fifty (250) employees purposively sampled from National Financial Credit Bank (NFCB), the United Bank for Africa (UBA) and Eco Bank from the centre and littoral regions of Cameroon. Data was analysed using Structural Equation Modelling (SEM) with the aid of SPSS 23 and Amos 24. The study revealed that internal operational risk management practices, risk monitoring and control, and training and reporting have significant positive impact on financial performance. This study opined that financial performance increases with the implementation of internal operational risk management strategies. Furthermore, risk monitoring and control have significant mediating impact between training and reporting and financial performance. This study therefore recommends that the provisions of operational risk management strategies as prescribed by the Basel I, II, III and IV accords are significant drivers of a stable and resilient financial system in the case of Cameroon.

ПОРІВНЯННЯ ФІНАНСОВОЇ СТІЙКОСТІ БАНКІВСЬКИХ СИСТЕМ КРАЇН ЄВРОПИ

У статті здійснено порівняння фінансової стійкості банківських систем країн Європи на основі застосування найбільш вживаних підходів до оцінювання її рівня; визначено основні тенденції зміни рівня фінансової стійкості банківських систем в даних країнах протягом останніх років; проаналізовано поточні заходи з боку державних органів та регуляторів в країнах Європи, спрямовані на підвищення рівня фінансової стійкості банківської системи.