Monitoring the financial security of the Ukrainian banking sector in the context of system-deterministic challenges

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The development of the financial market and the transformation of the banking sector create a need for diagnostics of its financial security. This study is aimed at determining the level of the Ukrainian banking sector financial security in the event of decapitalization of the national economy. The paper uses multicomponent and behavioral analysis methods. The empirical study is based on Ukrainian data for 37 indicators by three components (for multicomponent analysis) and 23 indicators (for behavioral analysis). The study presents an improved algorithm for monitoring the level of Ukrainian banking sector’s financial security based on the calculation of the integral indicator. Only the system of “Financial results” indicators as the most significant component has relative independence from the other two components (“Financial stability” and “Macroeconomic stability”). According to assessments, in 2008–2017 Ukrainian banking sector’s financial security was 0,485-0,539; and in 2018 it became 0,626. The behavioral analysis of the partial integral indicator of the “Financial stability” component with the withdrawn assets located in offshore jurisdictions revealed the causal relation of the negative impact of capital outflow on the financial stability of the banking sector. This study has a practical value for determining the level of the banking sector financial security.

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    • Figure 1. Dynamics of indicators by components (IR1-IR3) and an integrated indicator of Ukrainian banking sector’s financial security (IR) in 2014–2018
    • Figure A1. Algorithm for monitoring the Ukrainian banking sector financial security
    • Table 1. Criteria for a qualitative assessment of Ukrainian banking sector’s financial security
    • Table 2. Matrix of paired correlation coefficients
    • Table 3. Checking the significance of paired correlation coefficients
    • Table A1. System of indicators for evaluating the Ukrainian banking sector’s financial security
    • Table B1. Performance system of the “Financial results” component
    • Table B2. System of indicators of the “Financial stability” component
    • Table B3. System of indicators of the “Macroeconomic stability” component
    • Table C1. Standardized values of indicators of the components, partial integral indicators (IR1, IR2, IR3) and total integrated indicator (IR)
    • Conceptualization
      Nadiia Yasynska
    • Funding acquisition
      Nadiia Yasynska, Iryna Syrmamiikh, Oksana Penez
    • Investigation
      Nadiia Yasynska, Iryna Syrmamiikh, Oksana Penez
    • Methodology
      Nadiia Yasynska, Iryna Syrmamiikh
    • Project administration
      Nadiia Yasynska, Iryna Syrmamiikh
    • Supervision
      Nadiia Yasynska
    • Validation
      Nadiia Yasynska, Iryna Syrmamiikh
    • Writing – original draft
      Nadiia Yasynska, Iryna Syrmamiikh, Oksana Penez
    • Writing – review & editing
      Nadiia Yasynska, Iryna Syrmamiikh, Oksana Penez
    • Formal Analysis
      Iryna Syrmamiikh
    • Software
      Iryna Syrmamiikh, Oksana Penez
    • Data curation
      Oksana Penez
    • Resources
      Oksana Penez
    • Visualization
      Oksana Penez