REALITIES AND EFFECTIVENESS OF THE UKRAINIAN BANKING SYSTEM
The paper deals with the analysis of the banking system of Ukraine. It is shown that for Ukraine the frequency and depth of crisis phenomena in the banking sector are exacerbated by the raw material orientation of the economy, underdeveloped domestic market and the circulation of foreign currency (...
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| Format: | Article |
| Language: | English |
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FINTECH Alliance LLC
2022-07-01
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| Series: | Фінансово-кредитна діяльність: проблеми теорії та практики |
| Subjects: | |
| Online Access: | https://fkd.net.ua/index.php/fkd/article/view/3766 |
| _version_ | 1826995737968246784 |
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| author | Maryna Korol Olena Bazhenova Ihor Korol Grygoriy Starchenko Volodymyr Bazhenov Oksana Banna |
| author_facet | Maryna Korol Olena Bazhenova Ihor Korol Grygoriy Starchenko Volodymyr Bazhenov Oksana Banna |
| author_sort | Maryna Korol |
| collection | DOAJ |
| description |
The paper deals with the analysis of the banking system of Ukraine. It is shown that for Ukraine the frequency and depth of crisis phenomena in the banking sector are exacerbated by the raw material orientation of the economy, underdeveloped domestic market and the circulation of foreign currency (dollarization of the economy). It should be noted that in the pre-crisis during 2006-2007, excessive mortgage lending created a "bubble" in the real estate market, which, comparing its devastating effects, corresponded to this phenomenon in the real estate market in the United States. Although the crisis of 2008-2009 demonstrated the vulnerability of the Ukrainian banking system to numerous economic and political upheavals, no significant changes in banking supervision took place to minimize systemic risks. Restoration of the banking system of Ukraine in 2015-2016 is generally in line with post-crisis trends to streamline the banking system and increase its efficiency in the world. At the same time, the weakness of the institutional environment makes it impossible to use both administrative tools and state development banks to increase productive lending in Ukraine. On the other hand, commercial banks will use refinancing loans instead of private-sector savings to lend. In this case, the probability of the need for financial support from banks increases, which will lead to a significant increase in public debt.
Moreover, a system of vector autoregression models has been developed to research the impact of crisis periods on the performance of commercial banks in Ukraine. The simulation results (mainly the analysis of impulse response functions) allow concluding that interbank lending in post-crisis conditions recovers relatively rapidly (with a lag of two years). Lending to non-financial corporations and non-residents showed a decline and recovery only within four years after the crisis. Lending to the general government sector is growing every year, but at the same time loans to other resident sectors are declining. In addition, during the year after the crisis, the volume of deposits in the banking system is demonstrating a decrease. Other variables do not show any response to the crisis.
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| first_indexed | 2024-03-12T06:46:48Z |
| format | Article |
| id | doaj.art-fd48c3e0480d4414ab0c26779154bb8b |
| institution | Directory Open Access Journal |
| issn | 2306-4994 2310-8770 |
| language | English |
| last_indexed | 2025-02-18T09:36:47Z |
| publishDate | 2022-07-01 |
| publisher | FINTECH Alliance LLC |
| record_format | Article |
| series | Фінансово-кредитна діяльність: проблеми теорії та практики |
| spelling | doaj.art-fd48c3e0480d4414ab0c26779154bb8b2024-11-02T17:32:27ZengFINTECH Alliance LLCФінансово-кредитна діяльність: проблеми теорії та практики2306-49942310-87702022-07-0134410.55643/fcaptp.3.44.2022.3766REALITIES AND EFFECTIVENESS OF THE UKRAINIAN BANKING SYSTEMMaryna Korol0Olena Bazhenova1Ihor Korol2Grygoriy Starchenko 3Volodymyr Bazhenov4Oksana Banna5Doctor of Economics, Associate Professor, Associate Professor of the Department of International Economic Relations, State Higher Educational Establishment «Uzhhorod National University», UkraineDoctor of Economics, Associate Professor, Professor of the Economic Cybernetics Department, Taras Shevchenko National University of Kyiv, UkraineDoctor of Physical and Mathematical Sciences, Professor of the Department of Algebra and Differential Equations State Higher Educational Establishment «Uzhhorod National University»,UkraineDoctor of Economics, Associate Professor, Professor of Department of Public Administration and Organizations’ Management, Chernihiv Polytechnic National University, Chernihiv, UkrainePhD, Associate professor, Associate professor of the Department of Electric Networks and Systems, National Technical University of Ukraine “Igor Sikorsky Kyiv Polytechnic Institute”, Kyiv, UkrainePhD (Physical and Mathematical Sciences), Associate Professor of the Economic Cybernetics Department, Taras Shevchenko National University of Kyiv, Ukraine The paper deals with the analysis of the banking system of Ukraine. It is shown that for Ukraine the frequency and depth of crisis phenomena in the banking sector are exacerbated by the raw material orientation of the economy, underdeveloped domestic market and the circulation of foreign currency (dollarization of the economy). It should be noted that in the pre-crisis during 2006-2007, excessive mortgage lending created a "bubble" in the real estate market, which, comparing its devastating effects, corresponded to this phenomenon in the real estate market in the United States. Although the crisis of 2008-2009 demonstrated the vulnerability of the Ukrainian banking system to numerous economic and political upheavals, no significant changes in banking supervision took place to minimize systemic risks. Restoration of the banking system of Ukraine in 2015-2016 is generally in line with post-crisis trends to streamline the banking system and increase its efficiency in the world. At the same time, the weakness of the institutional environment makes it impossible to use both administrative tools and state development banks to increase productive lending in Ukraine. On the other hand, commercial banks will use refinancing loans instead of private-sector savings to lend. In this case, the probability of the need for financial support from banks increases, which will lead to a significant increase in public debt. Moreover, a system of vector autoregression models has been developed to research the impact of crisis periods on the performance of commercial banks in Ukraine. The simulation results (mainly the analysis of impulse response functions) allow concluding that interbank lending in post-crisis conditions recovers relatively rapidly (with a lag of two years). Lending to non-financial corporations and non-residents showed a decline and recovery only within four years after the crisis. Lending to the general government sector is growing every year, but at the same time loans to other resident sectors are declining. In addition, during the year after the crisis, the volume of deposits in the banking system is demonstrating a decrease. Other variables do not show any response to the crisis. https://fkd.net.ua/index.php/fkd/article/view/3766financial crisisbanksbanking systemfinancial stabilitybank assetsbank liabilities |
| spellingShingle | Maryna Korol Olena Bazhenova Ihor Korol Grygoriy Starchenko Volodymyr Bazhenov Oksana Banna REALITIES AND EFFECTIVENESS OF THE UKRAINIAN BANKING SYSTEM Фінансово-кредитна діяльність: проблеми теорії та практики financial crisis banks banking system financial stability bank assets bank liabilities |
| title | REALITIES AND EFFECTIVENESS OF THE UKRAINIAN BANKING SYSTEM |
| title_full | REALITIES AND EFFECTIVENESS OF THE UKRAINIAN BANKING SYSTEM |
| title_fullStr | REALITIES AND EFFECTIVENESS OF THE UKRAINIAN BANKING SYSTEM |
| title_full_unstemmed | REALITIES AND EFFECTIVENESS OF THE UKRAINIAN BANKING SYSTEM |
| title_short | REALITIES AND EFFECTIVENESS OF THE UKRAINIAN BANKING SYSTEM |
| title_sort | realities and effectiveness of the ukrainian banking system |
| topic | financial crisis banks banking system financial stability bank assets bank liabilities |
| url | https://fkd.net.ua/index.php/fkd/article/view/3766 |
| work_keys_str_mv | AT marynakorol realitiesandeffectivenessoftheukrainianbankingsystem AT olenabazhenova realitiesandeffectivenessoftheukrainianbankingsystem AT ihorkorol realitiesandeffectivenessoftheukrainianbankingsystem AT grygoriystarchenko realitiesandeffectivenessoftheukrainianbankingsystem AT volodymyrbazhenov realitiesandeffectivenessoftheukrainianbankingsystem AT oksanabanna realitiesandeffectivenessoftheukrainianbankingsystem |