The role of the banking system in supporting the financial equilibrium of the enterprises: the case of Ukraine

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The financial equilibrium (“financial health”) of the enterprises is a prerequisite for their sustainable development, which ensures macroeconomic stability of the economy and the welfare of the state. It should be supported by the banking system, which performs the function of the effective reallocation of capital. Recently, the Ukrainian banking system itself is in a challenging situation and is undergoing a period of transformation. The purpose of the study is to assess how sufficiently the banking system of Ukraine supports the financial equilibrium of enterprises and to find the possibilities to strengthen its role in the progress of the real sector of economy. The authors single out three stages of financial equilibrium growth; each of them can be supported by the relevant banking services. The empirical analysis proves that the Ukrainian banks successfully ensure only the first stage, namely, liquidity balancing. To quantitatively assess the role of the banking system in supporting the enterprises’ financial equilibrium, a multivariate regression applying mathematical gnostic analysis in the program shell R Console is used. The research makes it possible to find out that only the economy monetization, the share of time deposits of economic entities and growth rate of mortgage loans have a positive effect. The authors conclude that the problems of both enterprises and the banking system are in the sphere of development and implementation of government economic policy and are aggravated by the restrictive monetary policy.

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    • Figure 1. The stages of financial equilibrium growth and appropriate banking services
    • Figure 2. Some indicators on the base of lending activity of the Ukrainian banks in 2008–2017
    • Figure 3. Role of bank performance indicators in the forecasting the index of financial equilibrium of enterprises in Ukraine in the medium term
    • Figure 4. Priority ranking of bank performance indicators influence on the forecast index of financial equilibrium of enterprises in Ukraine in the short term
    • Figure 5. Forecast of the index of Ukrainian enterprises’ financial equilibrium for 2019–2020
    • Table 1. Database for analyzing the impact of the banking system on the financial equilibrium of enterprises in Ukraine in 2008–2017
    • Table 2. Correlation between the banks’ capitalization and the monetary indicators in Ukraine in 2008–2017
    • Table A1. Statistical characteristic of the model forecasting the financial equilibrium index of Ukrainian enterprises influenced by the banking system