ENHANCING THE FINANCIAL STABILITY OF BANKING INSTITUTIONS

Abstract

Financial stability of banking institutions is a key element of the stable functioning of the country’s financial system. In the conditions of a dynamic macroeconomic environment, military aggression against Ukraine, global financial challenges and an increased level of risks, ensuring the stability of the banking system is of particular relevance. This work is devoted to the study of the essence of the financial stability of banks, the factors that influence it, as well as modern approaches to its assessment and improvement. In the process of research, the scientific approaches of Ukrainian scientists to the interpretation of the concept of financial stability were analyzed, in particular in the works of O. Dzyublyuk, I. Babenko, Yu. Dovgal and others. Particular attention is paid to the influence of the regulatory policy of the National Bank of Ukraine and the international Basel III standards on the level of stability of banking institutions. The main factors that reduce the financial stability of banks are identified, including: credit risks, insufficient capitalization, a decrease in confidence on the part of depositors, as well as external shocks. The role of the European Banking Union and the European Central Bank as bodies that form unified approaches to banking supervision and regulation in the EU countries is considered. The paper outlines modern directions for reforming the banking system of Ukraine aimed at increasing its financial stability: strengthening bank capital, developing risk management, increasing  transparency and responsibility of banking activities. Practical recommendations are proposed for improving approaches to assessing the financial stability of banks based on a system of quantitative and qualitative indicators. The results obtained can be used in the activities of banking institutions, regulators, as well as in further scientific research in the field of banking stability.