Multifactorial study of the reliability of the banking system of Ukraine

Abstract

Introduction. Assessing the level of stability of the banking system and determining the set of factors that affect the level of its reliability is a permanent task for both scientists who research and practitioners who develop the financial system of Ukraine. While there is no universal yardstick for an unequivocal assessment of the level of reliability of banks, it is possible and necessary to investigate the factors affecting this economic phenomenon. Problem Statement. The financial stress index, which is used to assess the situation in the country's financial sector under the influence of 5 groups of factors, does not fully reveal the state of the banking sector itself. Factors causing stress in the banking system and their consequent impact on indicators reflecting its reliability are insufficiently researched. Purpose. Search for regularities and connections of indicators in the transmission chain: factors causing instability - indicators measuring the results of this influence - indicators assessing the level of reliability of banks. Methods. General scientific and special methods are used: correlation-regression analysis, synthesis, grouping, description, comparison, calibration of important elements, abstract -logical, generalization. Results. The structure of financial stress indicators of Ukraine and the EU was studied, the factors of banking stress and indicators characterizing their impact on two final indicators of the reliability level of banks - capital adequacy and liquidity - were determined and grouped. A correlational analysis of the relationships of these indicators was conducted based on historical data. It is hypothesized that a fourth pillar will be added to the three existing pillars of bank stability - capital adequacy, liquidity, risk management level. At the same time, the role of the level of capitalization as an exclusive indicator of reliability may decrease in favor of other pillars. Conclusions. It is necessary to determine, calibrate and group the factors that most significantly affect the stability of the banking system. The article proposes certain algorithms of this mechanism, singles out phenomena described by quantitative indicators, and based on correlation analysis of historical data, it is established that the level of capital adequacy is most affected by the share of loans in bank assets (internal factor) and the inflation rate (external factor). This effect is reversed. The level of leverage and the NBU discount rate have a direct effect on the level of liquidity of the banking system. However, the influence of the above-mentioned factors on the level of capitalization and liquidity of banks is not decisive, since the correlation coefficients do not exceed 0.7. This means that the reliability of the banking system is affected by a complex of factors that require further research.