PROBLEMS OF FUNCTIONING OF THE DEPOSITS GUARANTEE SYSTEM IN UKRAINE AND ITS APPROXIMATION TO EU REQUIREMENTS

Abstract

The relevance of the publication is due to the need to analyze the effectiveness of the Deposit Guarantee Scheme developed in Ukraine in the context of identified problems related to the clearing of the banking system of Ukraine by withdrawing from the market «schematic» and under-capitalized banks that had poor credit portfolios. The purpose of the article is to investigate the problems of the activity of the Deposit Guarantee Fund in Ukraine and to substantiate recommendations and measures for the improvement of this system. Research methods: terminological and statistical analysis, comparison, logical generalization, analysis, synthesis. The limits of the study: the analysis is limited by the study of internal factors for the period 2013–2018, as well as the available statistical information as of November 2019.The analysis of the main problems of the DGF activities has allowed to identify the key ones, which are currently: incorrect definition of the objectives of the Deposit Guarantee Scheme in Ukraine, which are enshrined in the DGF Development Strategy for 2013–2017; the lack of adequate interaction of the deposit guarantee system with other elements of the system of ensuring financial stability; limited resources of the Fund and lack of tools for profitable placement of own funds; a small amount of the guaranteed deposit amount for bank deposits and a limited number of claimants for reimbursement.The results of the analysis suggested ways to ensure approximation of national banking legislation to guarantee deposits to the requirements of the European Union, in particular to Directive 2014/49/EU and 2014/59/EU: clarification of legal terminology (definition of terms «unavailable contribution»; «contributory contribution»; «guarantee»; «target level»; «low risk assets», etc.); attribution to the main task of the Fund the protection of the rights of all contributors, including legal entities, financial institutions, etc. with the corresponding extension of the Fund's powers; changes to the Fund's financing system and investment principles of the Deposit Guarantee Scheme in line with EU standards, etc.The findings and recommendations obtained from the analysis will have a positive effect on improving the efficiency of the deposit guarantee system in Ukraine and bringing it closer to EU requirements.