Bank-centric nature of the financial system of Ukraine: analysis of the current situation

The generalization of scientific approaches to the assessment of the financial stability of the banking system has demonstrated the multivariance of views on structuring and listing of financial stability indicators and has made it possible to distinguish three main ones: on the basis of macroeconomic and macro financial indicators; on the basis of separate indicators; based on synthetic indicators. It is proved that the latter is most effective since the large number and variability of financial ratios used by different authors to assess the level of financial stability of banking systems does not allow for unambiguous results. A hierarchic structure of indicators of the stability of the banking system is proposed, which is characterized by the simultaneous existence of a certain number, not ordered in a heterarchic manner. In accordance with it, the integral index of financial stability of the banking system includes subindices: stability of the NBU, stability of system banks, banks with foreign capital, banks with private capital, financial vulnerability of the banking system. The expediency of accounting for the indicators of financial risk assessment: credit, liquidity risk, interest rate, investment risk, unstable resource base risk, which are characterized by such financial ratios as part of provisions for depreciation of loans in the loan portfolio, is justified in the composition of such a synthetic indicator of the financial stability of the banking system; the norm of instant liquidity; net interest margin; part of the provision for depreciation of securities in the securities portfolio; coefficient of instability of the resource base. Also, indicators for assessing the stability of the central bank were proposed: indicators of the adequacy of reserves; indicators of the effectiveness of monetary policy; indicators of the effectiveness of foreign exchange regulation; indicators of compliance of banking supervision with the main principles of efficiency. This approach will allow taking into account all the structural components of the banking system in the process of assessing financial stability, on the one hand, and in time to identify potential threats to the loss of stability, on the other.

The article deals with topical issues to develop the banking sector in Kazakhstan as their condition assessment, weaknesses, strengths, problems and basic ways of development of Kazakhstan’s second-tier banks in the current environment, these issues are discussed in this article and determine the relevance of the material presented. The need to address the main problems in the development of the banking sector is due to the fact that it is represented as a fundamental element of the financial system. Moreover, under the modern conditions, it is subject to the impact of financial globalization, crisis phenomena in the world economy, the growth of uncertainty in the world financial market, which determines a number of negative consequences for the stable development of banking activities. Effective functioning of the banking system allows ensuring the sustainable economic development of any state, as the banking sector participates in the redistribution of funds and financing of the real sector of the country’s economy. At the present stage of the development, the issues of dealing with the key problems of the development of the banking sector acquire special relevance on a global scale, since the financial crisis has revealed the shortcomings of the current system of banking regulation and supervision. In this regard, in the crisis conditions, the state intervention in regulation of banking activities has intensified, the role of risk management in commercial banks has increased, the requirements to the bank’s capital, and the quality of assets has increased. Volatility and instability of the world financial markets require the search for new approaches in the implementation of banking activities to maintain sustainable development, increase margins in the banking business, which determines the relevance of this study. The main results of the research show the influence of external and internal factors that inhibit the development of banking activity.

“International Financial Centres” (IFCs) such as London or New York are one of several contributing factors toward the continued economic success of their respective countries in the twentieth-century. Other countries have attempted to create their own IFCs with mixed successes. This study examines factors that might predict the appearance of IFCs and the differences in financial scale. Of particular interest is the debate between ‘bank-based’ versus ‘capital-based’ financial systems and how it impacts the growth and success of IFCs. Results suggest that bank-based systems are marginally more effective at promoting and benefitting from IFCs. Stronger financial market regulations are also positively associated with the growth of IFCs and the resulting benefits that they provide to the rest of the economy. Together, this suggests that the optimal policy mix to promote IFCs may involve some degree of government involvement beyond strictly maintaining free and fair financial markets for the private sector.