scholarly journals STATE, DYNAMICS AND PROBLEMS OF UKRAINIAN BANKING SYSTEM LIQUIDITY

2020 ◽  
Vol 4 (2) ◽  
pp. 27-36
Author(s):  
P. Ilchuk ◽  
◽  
О. Kots ◽  
D. Martyniuk ◽  
E. Rak-Młynarska ◽  
...  
Keyword(s):  
Banking System ◽  
Sharp Change ◽  
Real Economy ◽  
Resource Base ◽  
Loan Portfolio ◽  
The Real ◽  
Excess Liquidity ◽  
Main Factors ◽  
Definition Of ◽  
Considerable Pressure

The approaches of scientists to the definition of categories “liquidity of banks” and “regulation of the banking system’ liquidity” are investigated. A retrospective analysis of the NBU’s approaches to regulating the liquidity of the banking system was carried out and the use of two main methods used by the NBU to calculate the liquidity level of the Ukrainian banking system during the independence period was identified. Dynamic ranks of liquidity of the Ukrainian banking system and instruments of its change in 2012–2020 were constructed, stable dynamic tendencies and the main factors causing such dynamics were identified. The changes in the liquidity of the Ukrainian banking system in the periods of the financial crisis 2014–2015 are analyzed in detail, the main factors of the change in the liquidity of the Ukrainian banking system during such period are identified. It was proved that the change in approaches to the calculation of the liquidity level of the Ukrainian banking system was accompanied by the implementation of a completely new refinancing tool for banks – NBU deposit certificates. It was also proven that changing the approach to calculating the liquidity level of the Ukrainian banking system and the use of a new refinancing tool resulted in maximizing the NBU’s influence on regulating the liquidity of the Ukrainian banking system. The crisis of excess liquidity of the banking system of Ukraine was detected, its time periods were identified, the main factors of its emergence and their quantitative characteristics were presented. The unproductive use of highly liquid assets by banks has been proved, which is caused by the processes of regulating the liquidity level of the banking system and the use of NBU certificates of deposit. A sharp change in the structure and level of liquidity of the banking system in 2020 and disruption of the transformation function of the banking system were identified. In particular, banks with significant free resources (76.24 % of banks' liquidity, which is equivalent to practically 20 % of the loan portfolio), are not able (or willing) to direct these resources to finance the real economy. Thus, a violation of the NBU’s monetary policy has been identified, which puts considerable pressure on the monetary sphere, and in the event that the NBU loses control of this process, excess liquidity of banks will cause an inflation spike. Also, the liquidity surplus in the second half of 2019 – early 2020 and the imbalance of the resource base are threatening to reduce the efficiency of banks in 2020. The NBU’s methodology for regulating banking liquidity with the help of mandatory standards is investigated. The legislative regulation of bank liquidity is analyzed and changes in the methods of calculation of liquidity ratios are revealed. Based on the analysis of retrospective data, it has been shown that, despite changes in the mandatory liquidity standards, during 2014–2020 the liquidity indicators exceeded the regulatory values several times, but peak exceedances were detected in 2020, which confirms the emergence of the excess liquidity crisis in the banking system of Ukraine. Grouping of banks by liquidity level revealed that practically 50 % of banks are in the range of 150–300 % of the standard, and 23 % of banks are in the range of 300–500 % of the standard, while 24 % of banks are in the range of more than 500 % of the standard. Such a significant excess of the liquidity ratio indicates the ineffective financing of banks in the real sector of the economy and the lack of attractive directions for active operations, which threatens both economic growth and efficiency of the banking system in 2020. The research develops key recommendations for banks to prevent excessive liquidity risk.

scholarly journals Banking system stability in the context of the relationship between banks and the state

2020 ◽  
Vol 3 (45) ◽  
pp. 155-166
Author(s):  
V. O. Kornіvska ◽  
Keyword(s):  
Banking System ◽  
Legal Framework ◽  
The State ◽  
System Stability ◽  
Banking Union ◽  
Real Economy ◽  
The Real ◽  
Euro Zone ◽  
European Experience ◽  
Financial Liquidity

The article presents the results of a study of the banking system stability under the conditions of increased financial support from the state during the financial and economic destabilization. The banking system stability in the euro zone has been analyzed to assess the prospects for monetary and financial development in Ukraine. The European experience proves that strengthening relations between banks and the state amidst the financialization process is harmful. The author of the article treats this relationship as a closed-loop problem of public and financial liquidity circulation, which leads to financial bleeding in the real economy and destabilization of the financial system, as a whole. This problem requires to be fixed by reducing banking transactions with government securities. The article gives facts proving that the search for solutions to this problem made in the European financial space has become one of the factors of financial and institutional transformations in the euro zone and the EU, in general, and has led to the creation of a banking union. The newly introduced legal framework has manifested itself as unable to stimulate efficient financial distribution. It has also been demonstrated that due to the public and financial liquidity circulation the banking system becomes subject to profound redesigning, thus losing its ability to conduct effective financial distribution in the real sector of economy.

Trennbankensystem – ein Weg zu mehr Finanzstabilität in Deutschland?

2014 ◽  
Vol 15 (1) ◽  
pp. 41-55 ◽  
Author(s):  
Andreas Dombret ◽  
Thilo Liebig ◽  
Ingrid Stein
Keyword(s):  
Significant Role ◽  
Financial Stability ◽  
Banking System ◽  
Real Economy ◽  
The Real ◽  
Considerable Fraction ◽  
The Us ◽  
Proprietary Trading ◽  
Systemically Important Banks ◽  
The Eu

AbstractThis article examines how the introduction of a specialised banking system is likely to impact banks and the real economy in Germany, in particular from a financial stability perspective. This study is motivated by a recently passed law in Germany on a specialised banking system (Trennbankengesetz), current reforms in the US and UK and proposals for the EU. We focus on the consequences of a separation of the savings & loan business and proprietary trading. We conclude that proprietary trading plays a significant role only for large, systemically important banks in Germany. The latter act as universal banks and grant a considerable fraction of all loans that go to domestic enterprises and consumers. Costs for customers, however, are likely to be moderate. In contrast, a specialised banking system may provide the important advantage that insolvent trading units can be separated more easily from the savings & loan business arm and eventually liquidated. In this way, implicit state guarantees may be reduced.

scholarly journals Identifying Systemically Important Companies by Using the Credit Network of an Entire Nation

Entropy ◽  
2018 ◽  
Vol 20 (10) ◽  
pp. 792 ◽  
Author(s):  
Sebastian Poledna ◽  
Abraham Hinteregger ◽  
Stefan Thurner
Keyword(s):  
Financial Institutions ◽  
Systemic Risk ◽  
Banking System ◽  
Real Economy ◽  
The Real ◽  
Using Data ◽  
Credit Network ◽  
First Time ◽  
Entire Economy ◽  
Financial Liability

The notions of systemic importance and systemic risk of financial institutions are closely related to the topology of financial liability networks. In this work, we reconstruct and analyze the financial liability network of an entire economy using data of 50,159 firms and banks. Our analysis contains 80.2% of the total liabilities of firms towards banks and all interbank liabilities in the Austrian banking system. The combination of firm-bank networks and interbank networks allows us to extend the concept of systemic risk to the real economy. In particular, the systemic importance of individual companies can be assessed, and for the first time, the financial ties between the financial and the real economy become explicitly visible. We find that firms contribute to systemic risk in similar ways as banks do. We identify a set of mid-sized companies that carry substantial systemic risk. Their default would affect up to 40% of the Austrian financial market. We find that all firms together create more systemic risk than the entire financial sector. In 2008, the total systemic risk of the Austrian interbank network amounted to only 29% of the total systemic risk of the entire financial network consisting of firms and banks. The work demonstrates that the notions of systemically important financial institutions (SIFIs) can be directly extended to firms.

scholarly journals Financialization and unconventional monetary policy: a financial-network analysis

2020 ◽  
Vol 30 (5) ◽  
pp. 1385-1428
Author(s):  
Chiara Perillo ◽  
Stefano Battiston
Keyword(s):  
Monetary Policy ◽  
Euro Area ◽  
Financial Stability ◽  
Banking System ◽  
Real Economy ◽  
Unconventional Monetary Policy ◽  
The Real ◽  
Recent Debate ◽  
Policy Measures ◽  
Net Flows

Abstract Over the last decades, both advanced and emerging economies have experienced the emergence of the phenomenon known as financialization, that, until some time ago, was generally considered beneficial for the economy. The 2007-2008 crisis and the severe post-crisis recession called into question the assumptions underlying the positive perception of the role played by financialization in the economy. In particular, the effects of financialization on financial stability and inequality are now widely recognized. A recent debate focused on the effectiveness of unconventional monetary policy tools in transferring their effects on the financial sphere to the economic sphere (e.g., via stimulating the transmission of resources from the banking system to the real economy). Among these unconventional policy measures, Quantitative Easing (QE) has been recently implemented by the European Central Bank (ECB). In this context, two questions deserve more attention in the literature. First, to what extent QE may generate net flows of additional resources to the real economy. Second, to what extent QE may also alter the pattern of intra-financial exposures among financial actors and what are the implications in terms of financialization. Here, we address these two questions by mapping and analyzing the euro area multilayer macro-network of financial exposures among institutional sectors across financial instruments (i.e., loans, bonds, equity, and insurance and pension schemes) and we illustrate our approach on recently available data. We then test the effect of the implementation of ECB’s QE on some novel measures of financialization that we derive from the time evolution of the financial linkages in the multilayer macro-network of the euro area.

scholarly journals Stimulating the Banking Sector Participation in the System of the Real Sector of Economy Support

2020 ◽  
Vol 17 (5) ◽  
pp. 5-15
Author(s):  
E. V. Altukhova ◽  
M. A. Markov
Keyword(s):  
Banking Sector ◽  
Banking System ◽  
Real Sector ◽  
Real Economy ◽  
Economic Interests ◽  
The Real ◽  
Key Characteristics ◽  
Development Institutions ◽  
Micro Level ◽  
Business Entities

The development of the real sector is essential to ensure the growth of national economy in any country. The principle institution working with money in economy is banks. They maintain cash circulation of real sector companies and act as a source of investment, which is allocated in the form of banking credits. Taking into account the fact that the goal of stimulating the real economy growth is set not only for the banking system but for economy in general, the approach to its attaining should be complex and systematic. Because of that it is very important to develop a list of steps that could provide a differentiated approach in the system of supporting companies of the real sector. Such measures’ implementation includes the participation of development institutions and therefore, banks in the system of national projects realization. Upgrading legislative regulation in the sphere of interaction between banks and business entities is extremely important as well as the development of new finance tools providing the growth in finance potential in the real sector of economy. The article analyzes banks’ participation in crediting the real sector of economy in Russia, studies the key characteristics of crediting and puts forward steps both on the macro- and micro-level, which could coordinate economic interests of companies and banks and cut costs.

scholarly journals PROBLEMS OF FORMATION OF FINANCIAL RESOURCES OF THE UKRAINIAN BANKING IN CONDITIONS OF FINANCIAL INSTABILITY

2020 ◽  
Vol 288 (6) ◽  
pp. 7-16
Author(s):  
K. LARIONOVA ◽  
◽  
H. KAPINOS ◽  
D. BALAKTIONOVA ◽  
Keyword(s):  
Banking System ◽  
Decisive Role ◽  
Financial Resources ◽  
Financial Instability ◽  
Resource Base ◽  
Theoretical Approaches ◽  
Banking Institutions ◽  
The Difference ◽  
Domestic Banks ◽  
Definition Of

The aim of the study is to highlight theoretical approaches to the essence of financial resources of banking institutions, disclosure of their role and significance, analysis and evaluation of current trends and features of the formation of financial resources of the banking system of Ukraine. The article examines the concept of financial resources of the banking system of Ukraine, their importance and features of the formation of financial instability in modern conditions, their role in managing the resources of banks. It is shown that financial resources play a decisive role in the activities of banking institutions, because the success of banking activities and the development of the banking system of Ukraine as a whole depend on their condition. The difference between the concepts of “bank resources”, “financial resources of the bank” and “resource base of the bank” is studied and the own definition of “financial resources of the bank” is given both at the micro and macro level. The dynamics of financial resources of Ukrainian banks in 2016-2019 and their individual components are analyzed in detail. Much attention is paid to the analysis of the dynamics of the structure of liabilities of banking institutions of Ukraine, as well as indicators of the level of capitalization of domestic banks. The peculiarities of using the financial resources of the banking system of Ukraine are singled out, in particular the problems of resuming lending by banking institutions to the real sector of the economy, increasing the duration of long-term loans, investing in government securities (IGLBs and NBU certificates of deposit), insufficient capitalization of the banking system. The main directions of improving the formation of financial resources of Ukrainian banks are proposed.

Dynamic lag structure of deposits and loans interest rates and business cycles formation

2017 ◽  
Vol 25 (2) ◽  
pp. 114-132
Author(s):  
Bijan Bidabad ◽  
Abul Hassan
Keyword(s):  
Interest Rate ◽  
Business Cycles ◽  
Interest Rates ◽  
Banking System ◽  
Real Economy ◽  
Short Term ◽  
Structural Dynamic ◽  
Content Type ◽  
The Real

Purpose This paper aims to study the structural dynamic behaviour of the depositors, banks and investors and the role of banks in the business cycles. The authors test the hypothesis: do banks’ behaviour make oscillations in the economy via interest rate? Design/methodology/approach The authors dichotomized banking activities into two markets: deposit and loan. The first market forms deposit interest rate, and the second market forms credit interest rate. The authors show that these two types of interest rates have non-synchronized structures, and that is why money sector fluctuation starts. As a result, the fluctuation is transferred to the real economy through saving and investment functions. Findings The empirical results show that in the USA, the banking system creates fluctuations in money and real economy, as well as through interest rates. Short-term interest rates had complex roots in their characteristic, while medium and long-term interest rates, though they were second-order difference equations, had real characteristic roots. However, short-term interest rates are the source of oscillation and form the business cycles. Research limitations/implications The authors tested the hypothesis for USA economy, while it needs to be tested for other economies as well. Practical implications The results show that though the source of fluctuations in the real economy comes from short-term interest rates, medium- and long-term interest rates dampen real economy fluctuations and also work as economic stabilisers. Originality/value Regarding the applied method, the topic is new.

Irrigation Coefficient Analysis and its Research Progress

2013 ◽  
Vol 405-408 ◽  
pp. 2283-2286
Author(s):  
Feng Lin Zuo ◽  
Wei Hua Zhang ◽  
Xiao Lan Bai ◽  
Jin Hua Nong ◽  
Hai Qiang Zhao ◽  
...  
Keyword(s):  
Research Progress ◽  
Real Situation ◽  
The Real ◽  
Irrigation Methods ◽  
Methods And Techniques ◽  
Engineering Measures ◽  
Main Factors ◽  
Definition Of

Based on the definition of the irrigation coefficient, we discussed the main factors which affect the irrigation coefficient as well as the measures to improve the irrigation coefficient in agriculture. According to the variation and the different features of the irrigation coefficient in different regions and conditions, this article not only explores the basic way to improve the irrigation coefficient, but also gives measures including water apportion measures, management and engineering measures. The potential ability of improving the irrigation coefficient is analyzed preliminarily in the real situation of Chinese irrigation methods and techniques.

The Future of Monetary Reform and the Real Economy

2013 ◽  
pp. 307-338
Keyword(s):  
Interest Rates ◽  
Gold Standard ◽  
Formal Model ◽  
Banking System ◽  
Real Economy ◽  
Monetary Reform ◽  
The Real ◽  
Monetary System ◽  
Analytical Result ◽  
Unity Of Knowledge

The further analytical result derived from the previous chapters on the money and real economy relationship with financial bridging in a gold-standard system is now further extended to the requirement of the 100% Reserve Requirement Monetary System with the Gold-Standard. The formal model in this regard is developed in order to bring out the power of unity of the ethical worldview of avoiding interest rates and its replacement by trade instruments. The relationship between the Central Bank, commercial banks, and the real economy with the interest-replacing trade instruments is explained. The resulting configuration of the financial and banking system in this regard under the episteme of unity of knowledge is made to explain how stabilization is attained in this same kind of epistemic worldview and its monetary and real economy interrelationship. Thus, the socio-cybernetic worldview of pervasive complementarities, equivalently participation, representing unity of knowledge in the good things of life, is once again expounded.

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