A model for analyzing the financial stability of banks in the VUCA-world conditions

  • 123 Views
  • 23 Downloads

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License

VUСA is a chaotic and rapidly changing business environment that, based on the variability, uncertainty, complexity and ambiguity of the modern world, transforms the approach of banks to the analysis of financial stability. The aim of the paper is to improve tools for monitoring the impact of VUCA-world conditions on the financial stability of banks, namely a model for studying and analyzing the impact of the modern business space “VUCA” on the financial stability of the country's banks. To test the model, the method of constructing regression equations in multifactor regression analysis is used. For this study, data from some Eastern European countries (Ukraine, Belarus, Latvia, Lithuania, Moldova) were used, and time series data were used for 10 years from 2010 to 2019.
Having considered the definition of “VUCA-world conditions”, the model of modern business space “VUCA” was developed when analyzing the activity of banks in the studied countries. Drivers, consequences, requirements and macroeconomic indicators of the countries’ activities in the VUСA-world conditions are determined. The VUCA-world conditions also consider the study of key macroeconomic indicators that allow building long-term relationships throughout the value chain. The analysis of the studied Eastern European countries showed that with the increase of factors of GDP growth, GNI per capita growth, research and development costs, foreign direct investment, and net inflow of 1%, the effective ratio of bank capital and assets also increases. The assessment, in contrast to the existing ones, makes it possible to consider the impact of the macroeconomic environment of banks on their financial stability.

view full abstract hide full abstract
    • Figure 1. Gini index of the Eastern European countries for the period 2010–2019
    • Figure 2. Average ranks of the Gini index of the Eastern European countries for the period 2010–2019
    • Table 1. Average value of bank performance in some Eastern European countries on average for the period 2010–2019
    • Table 2. General indicators of development of the studied countries’ economies on average for 2010–2019 in the VUCA world conditions
    • Table 3. System for studying the impact of modern business space “VUCA” on the analysis of financial stability of the country’s banks
    • Table 4. Summary of regression analysis results of the dependence of bank capital to assets ratio on macroeconomic indicators
    • Table 5. Evaluation of the statistical significance of the regression model parameters with t-criterion
    • Conceptualization
      Svitlana Khalatur
    • Data curation
      Svitlana Khalatur, Olena Pavlenko
    • Formal Analysis
      Svitlana Khalatur, Liudmyla Velychko
    • Funding acquisition
      Svitlana Khalatur, Liudmyla Velychko
    • Investigation
      Svitlana Khalatur, Liudmyla Velychko, Olena Pavlenko, Mariia Huba
    • Methodology
      Svitlana Khalatur, Liudmyla Velychko, Oleksandr Karamushka
    • Project administration
      Svitlana Khalatur, Olena Pavlenko
    • Supervision
      Svitlana Khalatur, Liudmyla Velychko, Oleksandr Karamushka, Mariia Huba
    • Writing – original draft
      Svitlana Khalatur
    • Writing – review & editing
      Svitlana Khalatur, Liudmyla Velychko, Olena Pavlenko, Oleksandr Karamushka, Mariia Huba
    • Resources
      Liudmyla Velychko, Olena Pavlenko
    • Software
      Liudmyla Velychko, Olena Pavlenko, Oleksandr Karamushka, Mariia Huba
    • Visualization
      Olena Pavlenko, Oleksandr Karamushka, Mariia Huba
    • Validation
      Oleksandr Karamushka, Mariia Huba