Transformation of the Ukrainian banking system regulation: a new horizon of compliance with the international framework

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.

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MECHANISMS OF STATE REGULATION OF ANTI-CRISIS MANAGEMENT OF ECONOMIC SECURITY OF BANKING INSTITUTIONS OF UKRAINE

10.31732/ms ◽

2020 ◽

Author(s):

Yana Koval

Keyword(s):

Crisis Management ◽

Banking Sector ◽

Global Financial Crisis ◽

Banking System ◽

Economic Security ◽

State Regulation ◽

International Standards ◽

Wide Range ◽

Banking Institutions ◽

The Global Financial Crisis

An important condition for sustainable economic growth of the country is the reliability and predictability of the banking sector of the economy. The global financial crisis, which has also affected Ukraine, indicates the inconsistency of domestic monetary policy with the requirements of the economic environment. Bringing in line with international standards of banking institutions revealed internal and external risks and threats that negatively affected the functioning of the entire banking system and led to a decrease in the number of Ukrainian banks from 180 at the beginning of 2014 to 77 at the beginning of 2019. Negative changes which took place in the banking system of Ukraine reduced the overall level of its economic security and necessitated the development of an effective mechanism for state regulation of anti-crisis management of economic security of banking institutions in Ukraine. The monograph is devoted to solving a scientific problem related to the development of a mechanism for state regulation of anti-crisis management of economic security of banking institutions of Ukraine on the basis of the development of conceptual, methodological and applied components. In the course of the work the theoretical bases of realization of the mechanism of state regulation by anti-crisis management of economic safety of banking institutions of Ukraine are investigated. Diagnosis of the current state of state regulation by anti-crisis management of economic security of banking institutions. The directions of improvement of the mechanism of the state regulation by anti-crisis management of economic safety of banking institutions of Ukraine are developed. The monograph is designed for a wide range of scientists, managers, specialists in public administration and economic security, teachers, graduate students and students of higher education institutions studying the mechanisms of state regulation of crisis management of economic security of banking institutions in Ukraine.

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Financialization and the Cultural Attitude of Polish Society towards the Banking Sector

e-Finanse ◽

10.1515/fiqf-2016-0143 ◽

2016 ◽

Vol 12 (2) ◽

pp. 49-59

Author(s):

Lech Kurkliński

Keyword(s):

Banking Sector ◽

Global Financial Crisis ◽

Banking System ◽

Cultural Dimensions ◽

Mortgage Debt ◽

Cultural Attitude ◽

Cultural Aspects ◽

Polish Society ◽

Banking Institutions ◽

The Global Financial Crisis

Abstract The article is dedicated to changes in the cultural attitude of Polish society towards the banking sector under the conditions of progressing financialization and arising consequences for the ban¬king sector. First of all, attention is focused on the cultural characteristics of Poles, their attitude towards finance, especially in the period of transition. The main reference to cultural conditions relates to the tendency to save, incur loans, and the attitude towards banks. It is complemented, among other things, by the model of cultural dimensions by G. Hofstede and S. Schwartz, in line with which attempts are made to explain the mechanisms shaping the financial (banking) system and the financialization tendency. This picture is confronted with the present shape and evolution of the Polish banking sector since 1989, including the role of foreign capital. In particular, attention is focused on the image of banks towards challenges related to the global financial crisis and the main problem of Polish banking institutions, namely household mortgage debt in foreign currencies. The author presents a thesis that significant financialization cannot be indicated in Poland and the historical and cultural aspects do not cause its expansion to the same degree as in a number of other countries. However, certain features, such as preference for loans rather than savings, are favorable for this direction.

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PENERAPAN PERMODALAN BASEL III DAN IMPLIKASINYA TERHADAP KINERJA PERBANKAN DI INDONESIA

10.31227/osf.io/mnhcj ◽

2019 ◽

Author(s):

Komang Agus Rudi Indra Laksmana

Keyword(s):

Financial Crisis ◽

Impact Analysis ◽

Banking Sector ◽

Global Financial Crisis ◽

Balance Sheet ◽

Banking System ◽

Capital Adequacy ◽

Basel Iii ◽

Negative Effect ◽

The Global Financial Crisis

The global financial crisis that occurred in 2007/2008 has encouraged state leaders who are membersof the G-20 to declare international efforts aimed at increasing transparency, accountability and regulation ofthe financial sector through strengthening the quantity and quality of the banking sector capital. This was basedon the occurrence of the global financial crisis in 2008, one of which was caused by the excessive level of leveragein the banking system both for the position recorded on the balance sheet (on-balance sheet) and inadministrative accounts (off-balance sheet). The final results of the recommendations are thenissued by Basel III:A global regulatory framework for more resilient banks andbanking systems on December 2010. In general, theBasel III agreement has threemain components, namely capital, liquidity and leverage ratio. The applicationofBasel III capital has an impact that will vary in various countries depending onthe number of exposures affected.This study conducted an impact analysis on theperformance of Basel III capital towards the performance of banksin Indonesiaduring the period of 2018 based on capital adequacy (CAR), and on the liquidity(NSFR, LCR) on growthin profitability (ROA). The study involved 11 banks withthe largest assets in Indonesia in 2018. The results showedthat CAR had asignificant negative effect on ROA, while the NSFR had a significant positiveeffect on ROA,and LCR had a significant negative effect on ROA. This study waslimited in terms of the number of samples anddata used, therefore furtherresearch is expected to increase the amount of data and samples and researchvariables.Keyword: Basel III; CAR; LCR

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THE BASEL III REGULATORY FRAMEWORK AND ITS IMPLICATION ON THE LIQUIDITY OF THE BANKING SECTOR IN THE REPUBLIC OF NORTH MACEDONIA

Knowledge International Journal ◽

10.35120/kij34010133v ◽

2019 ◽

Vol 34 (1) ◽

pp. 133-138

Author(s):

Zhelao Vytev ◽

Hazir Gashi

Keyword(s):

Banking Sector ◽

Global Financial Crisis ◽

Banking System ◽

Regulatory Framework ◽

Basel Iii ◽

Regulatory Requirements ◽

Regulatory Measures ◽

The Republic ◽

The Global Financial Crisis ◽

The Impact

The advent of the global financial crisis and its consequences have led the banking system to work towards more stringent regulatory rules. Additional regulatory requirements affect various aspects of banks' operations. In this regard, one of the most important questions that arises is how the implementation of the new Basel III regulatory framework affects the liquidity of banking institutions.The focus in this paper is the liquidity of the banks in the Republic of Northern Macedonia. The subject of the study is focused on the strength and direction of the impact of the new Basel III regulatory framework on their liquidity. The aim of the study is to reveal the effect of the use of modern regulatory requirements on liquidity of the banking system. A coefficient analysis is applied using a system of appropriately selected indicators: change (increment or decrease) of liquid and highly liquid assets, relative share of liquid and highly liquid assets in the structure of assets, coverage of liabilities with liquid assets, coverage of short-term liabilities with liquid assets, coverage of deposits by non-financial entities with liquid assets, “loans / deposits” ratio.The study includes observations on developments in the banking sector of the Republic of Northern Macedonia for the period 2007-2018. In terms of the impact of the new regulatory framework on banking liquidity, the twelve-year period analysed includes three distinct phases: 1) the time before the onset of the global financial crisis (until 2009); 2) the crisis period (2009 to 2012); 3) the post-crisis period (after 2012), during which the new regulatory measures are gradually moving (Basel III). For the purposes of the study, two working hypotheses are formulated: 1) first hypothesis - the new rules for regulating liquidity and capital adequacy have a negative or stagnant effect on the liquidity of banks in the Republic of Northern Macedonia, manifested in the form of sensitive fluctuations or in the form of sensitive fluctuations or a number of their financial liquidity indicators; 2) second hypothesis - the implementation of the new regulatory measures does not adversely affect banks' liquidity. The analysis of real empirical data shows that the implementation of the new regulatory measures does not have a negative impact on the liquidity of banks in the Republic of Northern Macedonia, but rather, a tendency to stabilize and improve a number of their key liquidity indicators.

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PANDEMIC CRISIS AND ITS EFFECTS ON BULGARIAN BANKING SYSTEM’S EFFICIENCY

10.31410/eman.2021.95 ◽

2021 ◽

Author(s):

Gergana Mihaylova-Borisova ◽

Keyword(s):

Growth Rate ◽

Interest Rates ◽

Banking Sector ◽

Global Financial Crisis ◽

Negative Impact ◽

Debt Crisis ◽

Parametric Method ◽

Banking System ◽

Data Envelopment ◽

The Global Financial Crisis

The economies are once again facing the challenges of another crisis related to the spread of coronavirus in 2020. The banking sector, being one of the main intermediaries in the economies, is also affected by the spread of the new crisis, which is different compared to the previous crises such as the global financial crisis in 2008 and the European debt crisis in 2012-2013. Still, the banking sector in Bulgaria suffers from the pandemic crisis due to decelerated growth rate of loans, provided to households and non-financial enterprises, as well as declining profits related to the narrowing spread between interest rates on loans and deposits. The pandemic crisis, which later turned into an economic one, is having a negative impact on the efficiency of the banking system. To prove the negative impact of the pandemic crisis on the efficiency of banks, the non-parametric method for measuring the efficiency, the so-called Data envelopment analysis (DEA), is used.

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Asymmetric Procyclicality of Chinese Banking and the Countercyclical Buffer of Basel III

Discrete Dynamics in Nature and Society ◽

10.1155/2015/318732 ◽

2015 ◽

Vol 2015 ◽

pp. 1-9

Author(s):

Yufeng Li ◽

Zhongfei Li

Keyword(s):

Financial Crisis ◽

Banking Sector ◽

Global Financial Crisis ◽

Capital Requirements ◽

Basel Iii ◽

Time Varying ◽

Regulatory Capital ◽

Economy Growth ◽

The Global Financial Crisis ◽

Chinese Banking

Since the global financial crisis of 2007-2008, the importance of the procyclicality in the banking sector has been highlighted. One of the Basel III objectives is to promote countercyclical buffers and reduce procyclicality. We apply time-varying copula combined with GARCH model to test the existence of asymmetric procyclicality of Chinese banking. The results show that the procyclicality of Chinese banking is asymmetric, where the dependence between loan and economy growth is more correlated during the decline stage than the rise stage of economy. Based on this asymmetry, we suggest that the authority can use high frequent index for signalling the start point of releasing countercyclical buffer and accelerate the releasing pace to avoid the supply of credit being constrained by regulatory capital requirements in downturns.

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The level of financial inclusion in Ukraine: Measuring access, quality, and usage of financial products and services

Banks and Bank Systems ◽

10.21511/bbs.16(2).2021.06 ◽

2021 ◽

Vol 16 (2) ◽

pp. 59-67

Author(s):

Yuliia Shapoval ◽

Andrii Shkliar ◽

Oleksii Shpanel-Yukhta ◽

Kateryna Gruber

Keyword(s):

Financial Literacy ◽

Financial Services ◽

Banking Sector ◽

Global Financial Crisis ◽

Banking System ◽

Financial Inclusion ◽

Clear Understanding ◽

Financial Products ◽

Medium Level ◽

The Global Financial Crisis

While financial inclusion is seen as a goal of socio-economic development, there is still no clear understanding of how to measure it. Following this concern, the paper deals with the computation of the financial inclusion index of the Ukrainian economy using an annual dataset spanning from 2008 to 2020 and following the Sarma methodology. The object of the study is a set of indicators of usage, access and quality of financial products and services. The obtained results demonstrate the medium level of financial inclusion. The improvement of financial inclusion is observed in 2012, 2013, 2020 (namely 0.55 – 0.56 in the range of 0 and 1). From 2015 (0.38) till 2018 (0.39), the revealed downward trend affirms that the withdrawal of banks from the market has deteriorated the level of quality and usage of financial products and services. Financial inclusion declined during the cleaning up of the banking system in 2014–2016, just as it did after the global financial crisis in 2009–2010. Despite the development of the payment infrastructure, there is a need to diversify access, increase quality, and quicken the usage of financial products and services due to existing distrust in national financial institutions. Improving financial literacy and consumer protection, and closing regulatory gaps in the non-banking sector are seen as ways to enhance financial inclusion. Thus, financial regulators should establish an upward trend in financial inclusion that will ensure full access to formal financial services and will not adversely affect the stability of financial system.

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Basel III LCR Requirement and Banks’ Deposit Funding: Empirical Evidence from Emerging Markets

Journal of Central Banking Theory and Practice ◽

10.2478/jcbtp-2019-0016 ◽

2019 ◽

Vol 8 (2) ◽

pp. 101-128

Author(s):

Tafirei Mashamba ◽

Rabson Magweva

Keyword(s):

Emerging Markets ◽

Banking Sector ◽

Global Financial Crisis ◽

Emerging Market ◽

Basel Iii ◽

Short Term ◽

Liquidity Shocks ◽

Coverage Ratio ◽

Banking Institutions ◽

The Impact

Abstract In December 2010, the Basel Committee on Baking Supervision introduced the liquidity coverage ratio (LCR) standard for banking institutions in response to disturbances that rocked banks during the 2007/08 global financial crisis. The rule is aimed at enhancing banks’ resilience to short term liquidity shocks as it requires banks to hold ample stock of high grade securities. This study attempts to evaluate the impact of the LCR specification on the funding structures of banks in emerging markets by answering the question “Did Basel III LCR requirement induced banks in emerging market economies to increase deposit funding more than they would otherwise do?” The study found that the LCR charge has been effective in persuading banks in emerging markets to garner more stable retail deposits. This response may engender banking sector stability if competition for retail deposits is properly regulated.

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Slovenian economy in the grip of credit crisis – How to proceed?

Acta Agraria Debreceniensis ◽

10.34101/actaagrar/63/1830 ◽

2015 ◽

pp. 19-25

Author(s):

Imre Balogh

Keyword(s):

Banking Sector ◽

Global Financial Crisis ◽

Banking System ◽

Financial System ◽

Policy Decision ◽

Credit Crisis ◽

Corporate Sector ◽

Credit Expansion ◽

Debt Overhang ◽

The Global Financial Crisis

The Slovenian economy has been through steep ups and downs post-EU accession (2004), and is at the crossroads again. The period 2004–2008 was characterized by balanced monetary and fiscal policies resulting in the adoption of the Euro (2007), coupled with overheated economic growth and propelling corporate indebtedness, fuelled by rapid credit expansion from cheap and abundant foreign funding. The global financial crisis has exposed the “home-grown” vulnerability of the Slovenian economy, bringing about the second largest GDP fall (9.4%) in the Eurozone after Greece, with a double-dip recession (2009, 2012–13). Growth rebounced in 2014 to 2.6% from its low, but the competitiveness of the Slovenian economy continued to slide in international rankings. For further recovery Slovenia, squeezed by high public debt at 82% of GDP, credit contraction despite EUR 5bn state aid injected into the 70% domestically (basically state) owned banking sector, and the continued threat of massive bankruptcy and debt overhang in the corporate sector, has 3 fundamentally different policy options. − Profound restructuring of the banking system and the real sector, on the basis of earnest privatization and voluminous FDI inflow. − Slow creditless recovery due to half-hearted reforms in the financial system and corporate sector. − Substituting wide-ranging micro level restructuring with Government-stimulated credit expansion, reproducing current tensions in even higher magnitudes in the future. In the current state of the Slovenian economy, equity-led growth, combined with far-reaching institutional reforms seems the only choice in laying the foundation for long-term sustainable economic development. This study outlines the critical further steps in re-invigorating the financial system, utilizing also the proposals elaborated by the author and his banking team for the Slovenian macro policy decision-makers.

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Bank of Russia and bank supervision: Together forever?

Voprosy Ekonomiki ◽

10.32609/0042-8736-2019-10-85-98 ◽

2019 ◽

pp. 85-98 ◽

Cited By ~ 2

Author(s):

Oleg V. Buklemishev ◽

Dmitriy O. Vatolin

Keyword(s):

Financial Markets ◽

Global Financial Crisis ◽

Banking Regulation ◽

Banking Supervision ◽

Bank Supervision ◽

Macroprudential Policies ◽

The Status ◽

The Global Financial Crisis ◽

Phase Out ◽

The Impact

The paper discusses the feasibility of institutional changes in the Russian banking regulation (supervision). The historical and modern practice of the organization of regulatory activity in financial markets is described. Traditional theoretical arguments in favor of and against combining the functions of monetary policy and banking supervision within the Bank of Russia are considered and analyzed under current conditions. The impact of the global financial crisis is taken into account in terms of the need to institutionalize macroprudential policies and to coordinate them with microprudential policies. Based on this analysis the conclusion is made about the absence of fundamental preconditions for preserving the status quo in relation to banking supervision by the Bank of Russia in the context of considerable costs of correcting its errors. There commendation to phase out seniorage financing of banking supervision is given.

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