Operational control over the financial stability of banking

Author:

Kuznetsova Angela1,Samorodov Borys2ORCID,Azarenkova Galyna2ORCID,Oryekhova Kateryna3ORCID,Babenko Maksym4ORCID

Affiliation:

1. Doctor of Economics, Professor, The Banking University

2. Doctor of Economics, Professor, Kharkiv Educational and Scientific Institute of the Banking University

3. Ph.D. in Economics, Associate Professor, Kharkiv Educational and Scientific Institute of the Banking University

4. Lecturer, the Finance, Banking and Insurance Department, Kharkiv Educational and Scientific Institute of the Banking University

Abstract

Maintaining proper financial stability of each banking institution is one of the main tasks facing the banking system of Ukraine. This enables operational control over the financial strength of banking activities.The purpose of the article is to develop recommendations on the operational control of financial stability of banking and to test them using banking institutions in Ukraine as an example.To execute operational control over the financial stability of banking, economic standards of banking regulation are grouped under the “at least” or “not exceeding” principle. To determine their change over time, Shewhart control charts are proposed.The recommendations were tested through the example of the Ukrainian banking institutions (with state, foreign and private capital). It was found out that in 2017–2019, the following three economic standards of banking regulations were not met: regulatory capital adequacy, high credit risk, and average investments; besides, there were two standards at the limit of control value: the ratio of regulatory capital to total assets and the maximum amount of credit risk per counterparty.To improve the financial status of banking institutions, it is recommended to take organizational and financial measures to change the average value of the relevant economic standards for banking regulation to a level that ensures financial stability.

Publisher

LLC CPC Business Perspectives

Subject

Finance,Management of Technology and Innovation,Marketing,Organizational Behavior and Human Resource Management,Law

Reference28 articles.

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4. Bodretskyi, M. V. (2018). Vplyv rozvytku merezh prodazhiv na stiikist bankivskoi ustanovy [The impact of the development of sales network on the stability of a banking institution]. Modern Economics, 8, 15-28. (In Ukrainian). - http://nbuv.gov.ua/UJRN/modecon_2018_8_4

5. Development of a methodology of evaluation of financial stability of commercial banks

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