scholarly journals Analysis of compliance with economic standards by Ukrainian banks

2020 ◽  
pp. 23-27
Author(s):  
Viktoriia KREMEN ◽  
Olha KREMEN ◽  
Viktoriia KOLOS ◽  
Tetiana SKOBLENKO
Keyword(s):  
Credit Risk ◽  
Banking System ◽  
Maximum Amount ◽  
Minimum Size ◽  
Necessary Condition ◽  
Normative Values ◽  
Banking Supervision ◽  
Regulatory Capital ◽  
Credit Risks ◽  
Methodical Approach

Effective functioning and productive development of the banking system is a necessary condition for Ukraine’s economic development. Therefore banking supervision is an integral element of maintaining stability in the banking system. The National Bank of Ukraine implements this task by establishing regulatory and legal support for banking activities and establishing economic standards for banking activities. The paper is devoted to studying the essence of banking supervision and the establishment and monitoring of economic standards of banking as a direction of its providing, as well as assessing the level of compliance with economic standards by Ukrainian banks. The paper presents the primary economic standards that banks operating in Ukraine must comply with. The calculation of the integrated indicator is based on the values of the following standards: capital – the minimum size of regulatory capital, sufficiency (adequacy) of regulatory capital, the sufficiency of fixed capital; liquidity; credit risk – the maximum amount of credit risk per counterparty, large credit risks, the maximum amount of credit risk for transactions with persons related to the bank; investment – investing in securities separately for each institution, the total amount of investment. A methodical approach to calculating the integrated indicator of compliance with economic standards in banking is proposed. The main stages are the following: standardization of normative values, the formation of a reference vector, calculation of Euclidean distances, and determination of values of the integral index. In 2017, the integrated indicator of compliance with economic banking standards increased significantly, increasing from 0.16-0.23 in February and March to 0.60 in August. In 2018, the compliance with economic standards by Ukrainian banks was as a whole at a higher level 0.50-0.60.

scholarly journals The NBU Economic Standards as an Instrument for Regulating the Banking Activities

2021 ◽  
Vol 3 (518) ◽  
pp. 119-126
Author(s):  
L. V. Sus ◽  
◽  
Y. Y. Sus ◽  
Keyword(s):  
Credit Risk ◽  
Commercial Banks ◽  
Banking System ◽  
Banking Supervision ◽  
Correlation And Regression Analysis ◽  
Basel Committee ◽  
Credit Risks ◽  
Banking Institutions ◽  
Banking Institution ◽  
The Impact

Researching the problems of banking supervision in the course of the policy of cleaning the banking system of Ukraine is of particular importance. The issues of efficiency of regulation of the activities of commercial banks with the help of economic standards of the NBU remain topical. The article is aimed at a theoretical-methodical substantiation of the NBU economic standards system and identifying the peculiarities of their application as instruments for regulating the banking activities. The state of compliance with capital, liquidity and credit risk standards by commercial banks of Ukraine is examined. A correlation and regression analysis of the impact of credit risk standards on the volumes of overdue credit arrears of banks is carried out. Ways to improve the system of regulation of the activities of commercial banks based on the principles developed by the Basel Committee on Banking Supervision are proposed. A further proposal is made as to introducing an additional economic standard for the regulation of credit risks, which would assess the risks of repayment of loans. In addition, it will be expedient for Ukraine to build a conceptual banking supervision, which will ensure close interaction of components in order to improve the efficiency of banking institutions. A comprehensive system of banking supervision should diagnose the level of risks and implement systems of their management at the level of each separate banking institution.

scholarly journals Operational control over the financial stability of banking

2020 ◽  
Vol 15 (1) ◽  
pp. 51-58
Author(s):  
Angela Kuznetsova ◽  
Borys Samorodov ◽  
Galyna Azarenkova ◽  
Kateryna Oryekhova ◽  
Maksym Babenko
Keyword(s):  
Credit Risk ◽  
Financial Stability ◽  
Control Charts ◽  
Banking System ◽  
Banking Regulation ◽  
Capital Adequacy ◽  
Operational Control ◽  
Regulatory Capital ◽  
Control Value ◽  
Banking Institutions

Maintaining proper financial stability of each banking institution is one of the main tasks facing the banking system of Ukraine. This enables operational control over the financial strength of banking activities.The purpose of the article is to develop recommendations on the operational control of financial stability of banking and to test them using banking institutions in Ukraine as an example.To execute operational control over the financial stability of banking, economic standards of banking regulation are grouped under the “at least” or “not exceeding” principle. To determine their change over time, Shewhart control charts are proposed.The recommendations were tested through the example of the Ukrainian banking institutions (with state, foreign and private capital). It was found out that in 2017–2019, the following three economic standards of banking regulations were not met: regulatory capital adequacy, high credit risk, and average investments; besides, there were two standards at the limit of control value: the ratio of regulatory capital to total assets and the maximum amount of credit risk per counterparty.To improve the financial status of banking institutions, it is recommended to take organizational and financial measures to change the average value of the relevant economic standards for banking regulation to a level that ensures financial stability.

scholarly journals Risks in bank lending activity

2018 ◽  
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Banking Sector ◽  
Banking System ◽  
Bank Lending ◽  
Point Of View ◽  
External Control ◽  
Positive Trend ◽  
Credit Risks ◽  
Banking Institutions

This study focuses on the risks in banking. Today, commercial banks have a powerful management system, high-level automation tools, a rigid system of external control and developed risk-management. Management of credit risk lately has a special methodological interest. The purpose of the bank is to maximize profit, so it must pay particular attention to possible losses in conducting its operations. Specific types of risks that the bank most often encounters determine its performance. Since the income from lending activities makes up the most share of all revenues in the bank, the article focuses specifically on credit risk. The purpose of the research is to reveal trends in changes of the amount of credit risk of banking institutions and their influence on the stability of the banking system of Ukraine. The research of existing theoretical studies in the field of credit risk of banks, analysis of the current situation in the banking sector and solution of the following tasks: the author’s point of view on the essence of bank credit risk; improvement of the classification of credit risks of bank institutions, presentation and argumentation of the new view that takes into account the interests of both lenders and borrowers; justification of the main features of credit risks; improvement of risk management mechanism of banking institutions in lending operations as well as examination of economic standards of credit risks of Ukrainian banking institutions contributed to reaching the planned objective. The study undertaken allowed drawing a conclusion about the compliance of standards established by the National bank of Ukraine with the requirements and determining a positive trend towards stability and capitalization of the banking system on the whole. Potential directions for further researches were outlined.

scholarly journals Capital Adequacy In The Albanian Banking System; An Econometrical Analysis With A Focus On Credit Risk

2016 ◽  
Vol 12 (1) ◽  
pp. 271
Author(s):  
Kledian Kodra ◽  
Drini Salko
Keyword(s):  
Central Bank ◽  
Credit Risk ◽  
Banking Sector ◽  
Banking System ◽  
Capital Adequacy ◽  
Regulatory Capital ◽  
Nonperforming Loans ◽  
Bank Group ◽  
The Relationship

This paper examines the relationship between regulatory capital and credit risk within the Albanian banking sector. We estimate an equation which tries to capture the relationship among regulatory capital, nonperforming loans, profitability, total assets, liquidity and the level of growth in the GDP. The data is grouped and the analysis is performed in accordance with three banking groups. The grouping of the banks is in accordance with their size in the system and reflects the grouping used by the central bank for regulatory purposes. The model developed can be used to forecast required levels of CAR and it suggests that in the Albanian banking system, as well as for each bank group separately, the relationship between CAR and NPL is negative, the relationship between CAR and assets is negative for an unchanged level of regulatory capital, the relationship between CAR and profitability is positive, whereas the relationship between CAR and liquidity is negative. The effects of the change in the level of NPL on CAR are of a longer term nature, whereas the effect of the change in the level of assets on CAR is more of a shorter term nature.

scholarly journals CREDIT RISK ASSESSMENT IN THE BANK'S FINANCIAL ACTIVITY

2021 ◽  
Author(s):  
Olena Druhova ◽  
Svitlana Klepikova ◽  
Viktoriy Romaniv
Keyword(s):  
Credit Risk ◽  
Commercial Banks ◽  
Banking System ◽  
Bank Capital ◽  
Credit Risk Management ◽  
Loan Portfolio ◽  
Financial Activity ◽  
Credit Risks ◽  
Current State ◽  
Almost All

The purpose of the article is to study the current state of assessment and management of credit risk of banks, analysis of the regulatory framework governing credit risk management and the formation of reserves for active operations, as well as identifying ways to stimulate credit activity of banks in modern conditions. The main factors of credit risk by types of credit risks are presented. Particular attention is paid to individual and portfolio credit risk. The types of active operations on which determine the credit risk are defined. The general essence of commercial risk and directly credit risk of commercial banks is considered. Situations which can promote occurrence of credit risks in commercial banks are considered, and also methods and strategy of management by risks of commercial banks are developed. The article considers theoretical issues regarding the content and assessment of credit risk of the bank. The types of credit risk are identified and the characteristics of each of them are given. The complexity of the implementation and maintenance of such management systems is inversely proportional to the efficiency of the use of bank capital, that is, the more complex the method of calculating the risk – the less capital to be deducted on it. When calculating credit risk, the bank consolidates financial assets in accordance with the regulatory act - "Regulations on the determination of credit risk by banks of Ukraine for active banking operations." Indicators of EL, PD, LGD, EAD are assessed, which assess credit risk according to the regulations. The dynamics of credit risk standards of the banking system of Ukraine for 2009-2019 is considered. Statistics show that in 2019, almost all indicators of the loan portfolio are non-performing loans. Non-performing loans are loans that are doubtful or uncollectible until repayment. The quality of the loan portfolio with such a share of non-performing loans is a factor of inhibition and systemic risk. The calculations presented in the article show that state banks have the greatest credit risk, the share of non-performing loans does not decrease, even to 60%. Banks with a state share, not including Privatbank, are trying to reduce the level of lending risks. Recommendations for minimizing banking risk in financial activities are given.

Modern points of view on the natural person problem loans management system construction in the commercial banks

10.12737/6695 ◽  
2014 ◽  
Vol 8 (6) ◽  
pp. 158-170 ◽  
Author(s):  
Елена Анашкина ◽  
Elena Anashkina ◽  
Виктор Заернюк ◽  
Viktor Zaernyuk
Keyword(s):  
Credit Risk ◽  
Banking System ◽  
Recent Decade ◽  
Retail Sector ◽  
System Construction ◽  
Credit Risk Management ◽  
Actual Problem ◽  
Credit Risks ◽  
Business System ◽  
Banking Business

The article is connected with the scoring penalties (collection scoring) actual problem. This problem study popularity is provided by a number of reasons. At first, it happened in Russia for the reason of recent decade credit market, especially the retail sector, intensive development. Objectively, the increasing lending volumes leads to the credit risk increasing. The credit risks are connected with all the banking system in the country, especially with the credit and financial institutions. Therefore, the credit risk management in the retail sector quality is one of the most important factors of competitiveness of the bank. The well adjusting scoring model as one of the instrument of borrower credit risks level minimization, becomes the leading element in a banking business system, objectively, it leads to this phenomenon science researching necessity. This very fact, its actuality and value had determined the subject choice. The authors offered the scoring penalties system main elements.

scholarly journals Stress Testing for Credit Risk Exposure in Islamic Banks

2020 ◽  
Vol 6 ◽  
pp. 1
Author(s):  
Fadwa A Mohammed ◽  
Ibrahim A Onour ◽  
◽  
Keyword(s):  
Credit Risk ◽  
Stress Testing ◽  
Banking System ◽  
Risk Exposure ◽  
Probability Of Default ◽  
Islamic Banks ◽  
Macroeconomic Variables ◽  
Credit Risks ◽  
Macroeconomic Indicators ◽  
Design Stress

In this study, we investigate the link between default loans and macroeconomic and bank-specific variables to assess exposure of Islamic banks to credit risks, and then design stress testing scenarios to assess the banking system’s resilience to adverse shocks. The results suggest that credit risk exposure of Islamic banks in Sudan is mainly affected by bank-specific variables, which include changes in total assets, total deposits, and total loans; all of them have a negative and significant impact on the probability of default loans. The study also indicates that the macroeconomic variables, which include growth of domestic product, change in exchange rate premium, and change in money supply, have positive but insignificant effects on the risk of default loans. The study concludes by pointing out that the Islamic banking system in Sudan is more vulnerable to bank-specific risk exposure rather than macroeconomic indicators.

scholarly journals NBU'S influence on economic growth through bank capital regulations

2020 ◽  
Vol 93 (8) ◽  
pp. 47-56
Author(s):  
L. Sus ◽  
◽  
Yu. Sus ◽  
M. Sapatsinsky ◽  
S. Cherepansky ◽  
...  
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Banking System ◽  
Developed Countries ◽  
Capital Adequacy ◽  
Necessary Condition ◽  
Bank Capital ◽  
Regulatory Capital ◽  
Banking Institutions ◽  
The Impact

In crisis situations, stable and efficient functioning of banking institutions is a necessary condition for country’s economic growth. Capitalization is one of the important factors that creates a positive impact of the domestic banking system on economic development. The purpose of the study is to substantiate the patterns and differences in the strength and nature of the impact of capital adequacy requirements on the financial and economic development of countries. The key tasks include: research of capitalization indicatorsof the banking system of Ukraine; identification of the impact of bank capital adequacy on the financial and economic development of individual European countries and other highly developed countries. The research methods were: theoretical -study of foreign and domestic scientific literature, materials and publications, and empirical -measurement, comparison, grouping, rating, correlation and regression analysis.The article analyzes the essence of the concept of "bank capital" and identifies the peculiarities of its formation. The dynamics of equity and authorized capital of Ukrainian banks in recent years has been studied and the capitalization indicators of the banking system have been calculated. The structure of bank capital in terms of banking groups is presented. The share of equity of the largest banks in the banking system of Ukraine is calculated. The banks were grouped by the amount of capital in order to identify those banking institutions that need further additional capitalization. Prospects for the development of sources of growth of bank capital of state, foreign and private banks of Ukraine are analyzed and evaluated. The economic standards of the NBU (size of regulatory capital, adequacy of regulatory capital, adequacy of fixed capital) are characterized and the dynamics of regulatory capital indicators is presented. The rating of banks in Ukraine according to the highest and lowest indicator of regulatory capital adequacy is built. The results of the correlation between the capital of the banking system and the financial and economic indicators of development of a number of European and other highly developed countries are presented. The regularities and differences of the influence of banks' capital adequacy on the financial and economic development of countries using the method of correlation-regression analysis are characterized.Prospects for further research in this area are the improvement of existing or development of new economic and mathematical models to determine the forecast indicators of financial and economic development of the country when changing the supervisory requirements for capital adequacy of banks.

scholarly journals Multi-Country Study of Bank Credit Risk Determinants

2008 ◽  
Author(s):  
Nor Hayati Bt Ahmad ◽  
Mohamed Ariff
Keyword(s):  
Credit Risk ◽  
Emerging Economies ◽  
Banking System ◽  
Emerging Economy ◽  
Empirical Literature ◽  
Regulatory Capital ◽  
Banking Systems ◽  
Developed Economies ◽  
Management Quality ◽  
Risk Determinants

This paper presents fresh findings about key determinants of credit risk of commercial banks in emerging economy banking systems compared with developed economies. Australia, France, Japan and the US represent developed economies; emerging economies are India, Korea, Malaysia, Mexico and Thailand. Credit risk theories and empirical literature suggest eight credit risk determinants. We find anywhere from two to four factors are alone significantly correlated with credit risk of any one banking system. Regulatory capital is significant for banking systems that offer multi products; management quality is critical in the cases of loan-dominant banks in emerging economies. Contrary to theory or studies, we find leverage is not correlated with credit risk in our test period. Data transformations and statistical corrections ensured these results are reliable: Model robustness was tested using AIC. The model developed here could be applied to test more emerging economy banking systems to generalize our findings to other economies.  

Problems and prospects for the Russian banking supervision development in modern conditions

2020 ◽  
Vol 26 (6) ◽  
pp. 1283-1296
Author(s):  
K.A. Omarieva ◽  
P.G. Isaeva
Keyword(s):  
Banking System ◽  
Main Role ◽  
Banking Supervision ◽  
Monetary System ◽  
The Russian Federation ◽  
Document Flow ◽  
Development Methods ◽  
Further Development ◽  
Development Prospects

Subject. The article addresses problems and prospects for the banking supervision development in the Russian Federation under modern conditions. Objectives. We review the essence and methods of organization of the banking supervision, and identify the main problems and prospects for its development. Methods. To provide valid, reliable and reasoned recommendations, we apply normative and integrated approaches to the study of the banking supervision effectiveness in the current circumstances. Results. The paper investigates main problems and development prospects for the Russian banking supervision. The essential importance of supervision comes from the main role of the banking system in maintaining accounts of economic entities and making settlements. Even minor failures or delays in operations can lead to negative outcomes and disastrous consequences for the entire monetary system and the national economy. Therefore, we highlight issues that require attention, and make proposals for further development of the banking supervision. Conclusions. In the context of dynamically developing economy, the banking practice is becoming more complex. As a result, there is a need for new financial instruments that can reduce risks, increase the speed and efficiency of operations and document flow, and help achieve the world levels of introduced standards.

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