The consequences of the first stage of reforming Ukraine’s banking sector
The results of reforming the ukrainian banking system have considered in the article. The purpose of thå article is the intent to consider the discrepancy between the declared objectives of the banking system developmant and the actual indicators of the current situation. Changes in the structure of the banking system was analyzed based on the assessment of dynamics of bank’s current indicators in Ukraine during 2015-2016 years. The negative consequences of intensive crowding out private banks with ukrainian capital and the monopolization of the national banking system by state and foreign banking institutions have been identified in the article. These trends have created systemic risks not only in the banking system, but led to significant negative macroeconomic consequences for the whole economy. It is proved, that the share of foreign capital in charter capital of banks in Ukraine has reached a critical limit, which creates risks for the stability of the banking system. The level of concentration of the five largest banks in the total assets of the banking system has created a threat to financial and economic security. Therefore the structural changes in the national banking system caused by the first step in reforming have brought heavy macroeconomic risks. This happened because the process of «cleaning banks» was considerably long and opaque. As a result, the credibility of the policy of the regulator and banks has plummeted. This is contrary to the original purpose of reforms and needs to change orientation of monetary and banking regulation. At the heart of banking supervision should be quality relative indicators of functioning of banks, rather than the absolute size of capital requirements for banks.
Also the requirements for minimum capital and procedure for the capitalization of banks need to reduce. This would stop the artificial removal of small stable domestic banks from the market and prevent further accumulation of systemic risks for the economy and national security.
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Keywords: banking system, stages of reform, private banks, foreign capital, state banks, financial security. |
BANK OPERATIONS
Iryna Sokolovska
PhD, Associate professor of the department of
economic theory and competition policy
Kyiv National
University of
Trade and
Economics
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