scholarly journals Assessment of the Relationship between the Banking System on the Financial Security of the State

2021 ◽  
Vol 26 (1) ◽  
pp. 55-63
Author(s):  
Tetiana Kubakh ◽  
◽  
Yevhen Rudenko ◽  
Keyword(s):  
Financial Stability ◽  
Banking Sector ◽  
Banking System ◽  
The State ◽  
Public Confidence ◽  
Internal Source ◽  
Financial Security ◽  
External Threats ◽  
The Impact ◽  
The Relationship

Annotation. Introduction. Permanent financial crises, currency fluctuations, inflation expectations, intensification of competition, increasing regulatory requirements for bank capital and risk reserves, military-political instability, globalization processes - all this is pressure for a stable financial condition of the banking system. Given the Anglo-Saxon structure of the financial market of Ukraine, banks are in fact the only internal source of capital for individuals and legal entities, which determines the importance of the impact of the banking system on the financial security of the state. In the conditions of dynamism of the modern world the question of preservation of reliability and efficiency of the modern bank becomes more and more actual. The issue of crisis prevention, threats, risks is given considerable attention in world practice, which is due to the need to maintain public confidence in banking institutions. The resilience of the banking system and its members to internal and external threats cannot be ensured without effective tools for control and influence by the regulator. The state is directly responsible for ensuring not only the stable development of the banking services market, but also the effective functioning of all components of the financial system. Timely analysis of indicators of financial stability of the banking system allows to identify the main problems in the activities of domestic banks and identify areas for their elimination, which will ensure the stability of economic development of the state. Purpose. The purpose of the article is to clarify the essence of the concepts of "financial stability of the banking system" and "financial security of the state", as well as to determine the relationship between financial stability of the banking system and financial security of the state. Results. It is determined that assessing the financial stability of the banking system is an important strategic task to ensure the financial security of the state. The interconnectedness and the place of financial stability of the banking system among such categories as stability, security, efficiency and reliability are substantiated. As a result of the calculation, the place of the banking component in the general structure of the financial security of the state was clarified. The analysis allowed to systematize the main threats to the financial security of the state, the source of which are the factors of the banking sector

scholarly journals Formation of a Mechanism for Ensuring the Financial Security of the Bank

2021 ◽  
Vol 25 (1) ◽  
pp. 73-78
Author(s):  
Raisa Kvasnytska ◽  
◽  
Inna Dotsenko ◽  
Dmitrii Prystupa ◽  
◽  
...  
Keyword(s):  
Financial Stability ◽  
Banking System ◽  
Financial Security ◽  
Investment Funds ◽  
Investment Activity ◽  
Banking Services ◽  
Low Level ◽  
External Threats ◽  
Banking Institution ◽  
The Impact

Annotation. Introduction. The current situation in the market of banking services is due to the influence of internal and external factors that make the bank vulnerable to crises. The financial security of the bank is the key to its stable development, so its research is extremely important. The priority of ensuring the financial security of the bank necessitates a comprehensive approach by developing an appropriate mechanism to ensure the financial security of the bank, taking into account the impact of external and internal threats. Purpose. The purpose of the work is to develop elements of the mechanism for ensuring the financial security of the bank, taking into account internal and external threats. Results. Theoretical problems of the mechanism of financial security of the bank are considered. Based on a critical analysis of the economic literature, the author’s interpretation of the concept of “mechanism for ensuring the financial security of the bank” from the standpoint of the impact of internal and external threats. The purpose and tasks of the mechanism of ensuring the financial security of the bank are highlighted. It is proposed to divide the functions of the bank’s financial security mechanism into basic and specific functions, those that are inherent in banking. The principles of ensuring the financial security of the bank are highlighted. It is substantiated that the process of forming the mechanism of ensuring the financial security of the bank is complex and should take into account the impact of internal and external threats. The threats affecting the financial security of commercial banks are ranked, with their division into internal and external. The main threats to the external environment are: global or local financial crises; falling demand for loans and banking services; the level of distrust on the part of legal entities and individuals in the banking system; refinancing volumes and the size of the discount rate; low level of investment activity in the country, and consequently the lack of investment funds. The main internal threats to the bank’s financial security are: errors in strategic planning and forecasting; irrational use of the bank’s potential; low level of return on assets. The stages of the mechanism of ensuring the financial security of a banking institution on the basis of taking into account the impact of internal and external threats have been formed. Conclusions. Based on the proposed stages of the mechanism of financial security of the bank, taking into account the impact of internal and external threats, we can trace all possible options for using strengths and opportunities in developing a strategy for financial stability of the bank, as well as identify factors influencing the bank. Keywords: threats, internal threats, external threats, collateral, mechanism, financial security of the bank, functions of the mechanism, principles of the mechanism, subjects and objects of the mechanism.

scholarly journals ASSESSMENT OF FINANCIAL SECURITY OF THE BANKING SYSTEM OF UKRAINE

2020 ◽  
pp. 51-58
Author(s):  
Davydenko N. ◽  
Kolodiazhna V.
Keyword(s):  
Financial Stability ◽  
Banking Sector ◽  
Banking System ◽  
The State ◽  
Financial Security ◽  
Monetary System ◽  
Characteristic Features ◽  
The Stability ◽  
Financial Monitoring ◽  
High Level

Today, the basis of financial security of the state is to ensure the stability and security of the banking system, because the decline in confidence in banks causes damage to the financial security of the whole country. The purpose of the article is to study the essence of financial security of the banking sector and develop proposals for its strengthening based on an assessment of the state of the banking sector at this stage of economic development. The primary tasks of the banking system are the stabilization of the monetary system of the state, the accumulation of financial resources of society, ensuring the stability of the national currency, which together have a signi-ficant impact on its financial security. That is why it is necessary to determine the state of the banking sector of the state in terms of its ability to withstand internal and external negative factors in the banking process. Therefore, the state of financial security of the banking system is subject to constant analysis, especially in our time, due to the difficult military-political situation and economic instability in the country, which has negatively affected the activities of commercial banks. The article presents the main indicators of the banking sector of Ukraine during 2014–2019, which provide an opportunity to analyze trends in its state under the influence of internal and external factors. The main characteristic features of the banking system of Ukraine in the conditions of modern challenges are determined. According to the results of the analysis, it can be stated that the state of the banking system of Ukraine is quite unstable, primarily due to the change in the structure of the banking sector and the fact that Ukraine is on the way to overcoming the crisis of the banking system. As a result of the research, measures have been identified to ensure the stability of the banking sector and increase the level of financial security of the banking system. It is established that in order to further ensure the stability of the financial security of the banking system of Ukraine at a high level, considerable attention should be paid to improving the banking management system and tools of state financial monitoring of the banking sector.Keywords: financial security, state, banking system, solvency, financial stability. У статті визначено сучасні підходи до визначення сутності фінансової безпеки банківської системи держави, як основної складової її економічної системи. Визначено основну мету підтримки фінансової безпеки банку та структуру банківського сектору держави в розрізі його платоспроможності. Здійснено оцінку основних показників діяльності банківського сектору держави та проведено аналіз сучасного його стану протягом 2014–2019 рр. на основі офіційної статистичної інформації Національного банку України. Визначено вплив націоналізації ПАТ «Приватбанк» та обґрунтовано основні її наслідки для державної частки банківського сектору. Охарактеризовано ефективність функціонування банківської системи України, а також вплив банківської реформи на нівелювання наслідків кризи банківської системи.Ключові слова: фінансова безпека, держава, банківська система, платоспроможність, фінансова стійкість

scholarly journals EVALUATION OF FUNCTIONAL PERFORMANCE OF THE BANKING SYSTEM OF UKRAINE IN CONDITIONS FINANCIAL INSTABILITY

2021 ◽  
Author(s):  
Nataliia Danik ◽  
Kateryna Novak ◽  
Anastasiia Yakovenko
Keyword(s):  
Economic Crisis ◽  
Financial Stability ◽  
Structural Changes ◽  
Banking Sector ◽  
Synergistic Effects ◽  
Banking System ◽  
Scientific Article ◽  
Financial Instability ◽  
Industrial Complex ◽  
The Impact

The article covers the problems of the functioning of the banking sector of Ukraine during 2018-2021, as one of the main sectors of the financial market and the national economy as a whole. When analyzing the state of the banking sector, regularities and general trends in the functioning of the banking sector of Ukraine have been established, and appropriate calculations have been made. The impact of global financial crises on the activities of banking structures, which must operate in conditions of constant financial instability, is described. Today, the whole world, including Ukraine, is on the verge of a global financial and economic crisis. This raises the question of whether Ukrainian banks have the necessary margin of resilience to vulnerabilities to the financial and economic crisis. In recent years, the functioning and development of the banking system has been characterized by increased financial stability, the level of bank capitalization, liquidity, some improvement in asset quality, reducing risks in banking, as well as the presence of positive structural changes. Today, Ukraine's banking system operates in a complex socio-economic and legal environment, most of which - macroeconomic instability, irrational structure of the industrial complex, the crisis of science and technology, imperfect fiscal and monetary policy, low level of effective demand - complicate sustainable development banking sector and increase competitiveness. In conditions of instability, intensification of turbulent processes, the development of the banking system requires new innovative approaches to determining the mechanisms of effective functioning and stable development based on a system-synergetic approach, which led to the choice and relevance of the chosen topic of this scientific article. Efficiency of banks is a multicomponent, multifaceted, multidimensional system characteristic that depends on many factors and is an effective indicator of performance of functions and achievement of goals and objectives of banks development provided financial stability based on financial stability and dynamic balance, achievement of multiplicative and synergistic effects.

scholarly journals Factors Affecting Cost Efficiency in the Banking Sector of Kyrgyzstan

2017 ◽  
Author(s):  
Dastan Aseinov
Keyword(s):  
Economic Efficiency ◽  
Cost Efficiency ◽  
Financial Stability ◽  
Banking Sector ◽  
Banking System ◽  
Foreign Banks ◽  
Data Set ◽  
Factors Affecting ◽  
Domestic Banks ◽  
The Impact

Instabilities in the banking sector have had an adverse effect on the economy as a whole, since the largest share in the financial system and financial intermediation in Kyrgyzstan have been captured by banking sector. Economic efficiency in banking can be viewed as a source of financial stability of banking system. Economic efficiency of the banking is more important challenge not only for shareholders and managers of banks, and also for regulation and supervision authorities, and public and potential investors. The aim of this study is to examine factors affecting the banking cost efficiency for Kyrgyz banks. It is also important to choose the appropriate approach in measurement of banking cost efficiency, since there are many different methods. In this study preferred stochastic frontier approach which assumes random error term which captures sampling, measurement and specification errors. We adopted stochastic cost frontier model proposed by Battese ve Coelli (1995) which also allow to examine investigate the impact of variables on efficiency. We used unbalanced panel data set captured 17-23 Kyrgyz commercial banks for period of 2000-2013. Obtained results suggest that capitalization, foreign ownership, credit risk, liquidity risk and currency risk have most influence on cost efficiency scores of banks calculated averagely at level of 0,766. Overall results indicate that domestic banks more cost efficient than domestic private and foreign banks. Average cost efficiency scores of domestic banks, foreign and separately public banks are 0,848; 0,649 and 0,875, respectively.

Money laundering and financial stability: does adverse publicity matter?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Bahriye Basaran-Brooks
Keyword(s):  
Money Laundering ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Banking System ◽  
Public Confidence ◽  
Content Type ◽  
Reputational Risk ◽  
The Global Financial Crisis ◽  
The Impact

Purpose Already suffering reputational damage from the global financial crisis, banks face a further loss of trust due to their poor money laundering (ML) compliance practices. As confidence-driven institutions, the loss of reputation stemming from inadequate compliance with regulations and policies labels banks as facilitators of crime and destroys public trust both in the bank itself, peer banks and the wider banking system. Considering the links between financial stability and adverse publicity about banks, this paper aims to critically examine the implications of ML-specific bank information on financial stability. Design/methodology/approach This paper adopts a content analysis and a theoretical discussion by critically evaluating the role of bank compliance information on stability with references to recent case studies. Findings This paper establishes that availability of information regarding a bank involved in or facilitating ML might pose a threat to financial stability if bank counterparties cut their ties with the bank in question and when bank stakeholders show a strong and sudden negative reaction to adverse publicity. Though recent ML scandals have not caused immediate instability, general loss of confidence associated with reputational risk have had a destabilising effect on affected banks’ capital and liquidity. Originality/value There has been surprisingly little discussion to date on the impact of publicly available bank information on financial stability and public confidence within the ML compliance framework. This paper approaches the issue of publicly available banking compliance information solely through the prism of public confidence and reputational risk and its impact on macro-stability by examining recent ML scandals.

CHARACTERISTICS OF THE FINANCIAL SECURITY OF THE BANKING SECTOR IN THE REGION (ON THE EXAMPLE OF THE REPUBLIC OF KOMI)

2021 ◽  
Vol 2 (5) ◽  
pp. 98-108
Author(s):  
M. S. KYZYUROV ◽  
Keyword(s):  
Banking Sector ◽  
Banking System ◽  
The State ◽  
Financial Security ◽  
The Republic

The article presents the characteristics of the financial security of the regional banking sector, examines the threats to the financial state of the banking system in the region. The author's methodology for conducting a point assessment of financial security is proposed, based on the indicative method and the use of the nor-malizing function, as well as the distribution of ratings depending on the points awarded for six security zones. The method is tested on the example of the Republic of Komi. Significant threats to the financial security of the region have been identified, and recommendations for their elimination have been proposed. The meth-odology is proposed to be used when the state authorities and the Bank of Russia monitor the state of the banking sector in the region.

scholarly journals Bank challenges in the context of the COVID-19 pandemic

2020 ◽  
pp. 119-124
Author(s):  
Zhanna Dovhan
Keyword(s):  
Financial Stability ◽  
Banking Sector ◽  
Banking System ◽  
Research Problem ◽  
Customer Engagement ◽  
Current Crisis ◽  
Virtual Communication ◽  
Analysis And Synthesis ◽  
Article Analysis ◽  
The Impact

Purpose. The aim of the article is highlighting the main problematic aspects of the activities of the subjects of the banking sector in the context of the COVID-19 pandemic. Methodology of research. The theoretical basis of the study is the scientific works of foreign and domestic scientists on the research problem. The following methods are used in writing the article: analysis and synthesis – in the study of foreign and domestic experience in identifying problems in banks provoked by COVID-19; settlement and analytical – in the analysis of the impact of crisis phenomena on the activities of banks; abstract and logical – in substantiating theoretical generalizations and conclusions. Findings. The problems of functioning of banks in the conditions of COVID-19 distribution are investigated. It is substantiated that the priority directions of changes in the current principles of the banking system are providing services through digital channels, credit risk assessment and management, use of a range of digital opportunities to increase customer engagement, implementation of the concept of working world 4.0, which provide for the development of quality management, which, in turn, includes interaction with its employees and the creation of rules for virtual communication. Originality. Measures to avoid the consequences of the coronary crisis for banking institutions, in particular to monitor corporate borrowers and develop a strategy for working with retail customers, taking into account the specifics of the current crisis, and by introducing additional warning signals characterizing borrowers' vulnerability to COVID-19 are proposed. Practical value. The obtained results of the study can be used for further scientific research on the development of ways to overcome the crisis in the banking system caused by the pandemic, as well as in the practice of banks to ensure their financial stability. Key words: bank, banking system, banking sector, manager, COVID-19, crisis, remote service.

scholarly journals Effect of Bank Competition on Financial Stability: Empirical Evidence from Nepal

2018 ◽  
Vol 13 ◽  
pp. 19
Author(s):  
Surya Bahadur G.C. ◽  
Gyaneswar Sharma
Keyword(s):  
Financial Stability ◽  
Fixed Effects ◽  
Banking Sector ◽  
Banking System ◽  
System Stability ◽  
Annual Data ◽  
Bank Competition ◽  
Financial Industry ◽  
Banking Competition ◽  
The Impact

<p>There are two hypotheses about the relationship between competition and financial stability in the banking system: “competition-fragility” view argues that competition makes banks more likely totake excessive risks, thereby leading to fragility, while “competition-stability” view suggests that higherinterest rates in less competitive environments may cause borrowers to take higher risks,resulting in higher probability of non-performing loans and a more fragile system. This paper empirically examines the impact of competition on Nepalese banking system employing annual data of commercial banks from 1999 to 2012 period using fixed effects panel data model. The study period represents the era of rapid growth in financial institutions in Nepal. The HHI and n-bank concentration ratios are used as measure of competition while Z-index and nonperforming loans ratioare used as proxies of financial stability. The effects of macroeconomic factors and bank specific indicators are also taken into account. The results reveal that there is apositive relationship between greater banking competition and financial stability in Nepal, supporting the “competition-stability” view. Competition in banking sector is found to result in decrease in credit risk and contribute for financial stability. Mixed results have been achieved incase of the impact of bank competition on overall stability. The findings indicate that both higher concentration and higher competition are detrimental for stability. Hence, policymakers should facilitate further consolidation in the financial industry, however, it should be ensured that excessive consolidation doesn’t result in an environment that hinders competition. In addition,besides competition level in the banking system, macroeconomic situation of the country is found to be an important determinant of banking system stability.</p><p><em> </em><strong><em>Economic Literature</em></strong><em>, </em>Vol. XIII August 2016, page 19-31</p>

scholarly journals An Assessment of Financial Performance and Service Facility Improvement after Merger and Acquisition of Financial Institutions of Nepal

2021 ◽  
Vol 2 (2) ◽  
pp. 16-25
Author(s):  
Ganesh Bajgai ◽  
Radheshyam Pradhan
Keyword(s):  
Service Quality ◽  
Financial Performance ◽  
Financial Institutions ◽  
Financial Stability ◽  
Banking Sector ◽  
Merger And Acquisition ◽  
Public Confidence ◽  
Acquisition Process ◽  
The Impact

Merger and acquisition are one process to integrate the two or more similar types of institutions into one institution. Basically, more banking sectors are gone in merger and acquisition in Nepal. Nepal Rastra Bank has introduced the Merger by law – 2068 BS with the objective of reducing the number of BFIs, enhancing financial stability and promoting public confidence on the banking sector, which encouraged and compelled the banking sectors to proceed the merger and acquisition process for their long-term sustainability. Considering this status, the study was conducted to identify the impact of merger and acquisition on financial performance and service quality of financial institutions of Nepal. The study was conducted covering the category A and B bank which were established after merger and acquisition process. It was a cross-sectional study conducted among the 385 employees of banking sectors. The result shows that the financial performance and service quality of both types of banks (category A and B) was significantly difference in post-merger situation because the p value of t-test was less than .05 significant level.  

Sign in / Sign up

Export Citation Format

Share Document