Stress testing the banking systems: Approach of Ukraine

Abstract

Scientific-methodical approaches to stress testing Ukrainian banking system in the context of the banks groups: state-owned, owned by Russia, foreign, private Ukrainian are analyzed in this study. It identifies an influence of the different groups in regulate the level of financial stability of the banking system. Highest level of financial stability of Ukrainian banking system was found to be connected with activity foreign banks from Eastern Europe and Central Asia exclaims banks owned by Russia and Ukraine. The proposed study, by using NBU stress testing scenario and by impacting of the devaluation of the national currency, presents the improved methodology for determining the level of financial stability of banking groups in terms of crisis increase exchange rate. This study was conducted by way of review of the data on bank core capital and regulatory capital, real and nominal GDP, consumer price index and reducing the rate of UAH to EUR.