FINANCIAL AND ECONOMIC SECURITY OF BANKING INSTITUTIONS: THREATS AND WAYS TO MINIMIZE THEM

Abstract

The article determines the impact of the bank's financial andeconomic security on the security of the financial sector and thecountry as a whole. The security of the banking system depends onthe financial security of individual banking institutions. At the sametime, the problems which face the single bank lead to the bankingcrisis of the whole system. Conversely, the destructive impact of theinstability of the banking segment reflects the activity of the individualbank.The approaches to defining the concept of «financial andeconomic security of the bank» were generalized and, due to this, wecan determine this category as a dynamic state, characterized by abalance and resistance to the external and internal threats, efficiencyof organization and allocation of resources for ensuring sustainabledevelopment.The analysis of the current state of the banking segment in thecontext of credit risk and risks of capital adequacy, liquidity, andprofitability was made. External and internal threats to the financialand economic security of banking institutions are highlighted andways to minimize them are proposed. It is emphasized that internalthreats are unique to the individual banking institution and they can becontrolled and minimized. While external threats are inherent in theinstitutional environment and practically independent of the efforts ofthe individual participant in the banking system.At the same time, this system should develop and constantlyadapt to the changes of the external and internal environment toincrease the efficiency of functioning of the banking sector, whichdetermines the stability of the financial system of the country andcreates opportunities for growth of the national economy.