Macroprudential analysis of the banking sector of the ukrainian economy

Zherdetska Liliia
D.Sc. (Economics), Associate Professor, Head of the Banking Department, Odessa National University of Economics, Odesa, Ukraine e-mail: : lzherdetska@gmail.com, ORCID ID: http://orcid.org/0000-0001-5398-868X

Kambur Mariia
4th year student of the Odessa National University of Economics, Ukraine e-mail: : maskambur@gmail.com, ORCID ID: http://orcid.org/0000-0001-5398-868X

Cite this article:

Zherdetska L., Kambur M. Macroprudential analysis of the banking sector of the ukrainian economy. Scientific Bulletin of the Odessa National Economic University. 2021. № 5-6 (282-283). pp. 17-26.

Abstract

Introduction. To enable effective prevention, mitigation and avoidance of systemic risks and strengthen the financial system’s resilience to potential shocks, significant efforts have been made in recent years to establish an effective macroprudential policy (MPP) framework. This process has been driven largely by significant economic and social costs of the crisis episodes and the recognition of deficiencies in the contemporary regulatory framework, which proved to be insufficient to prevent such events. Purpose. Assessment of the state of financial stability of the banking system of Ukraine with the help of macroprudential policy indicators to improve the efficiency of macroprudential instruments to stabilize the banking system. Results The analysis of the dynamics of lending for several segments, derived the concept of the credit cycle, as well as the results of credit expansion. The liquidity norms that have been in force since 2015 were identified, especially the LCR, which was introduced from 2018, and the NSFR from April 2021. Concentration indices as well as indicators of systemically important banks were also highlighted. The increased focus on financial stability and MPP is closely correlated with the expansion, liberalization, integration and globalization of the financial system, High costs of crisis episodes have additionally spurred the development of macroprudential analysis so that issues in the area of financial stability have started to dominate academic debates and decision-making of economic policymakers. Conclusions. In sum, we can conclude that financial stability has been a key function of the Central Bank since its inception. Macroprudential analysis is an analytical reinforcement that has provided the ECB with tools to identify systemic risk and assessment tools that are suitable to support the calibration of macroprudential policies, such as the assessment of credit expansions to address systemic risk. While the system has come a long way since its inception, there are still a number of problems and open issues, and so work is underway to address the growing non-bank sector and associated market-based financing.

Keywords

macroprudential policy, systemic risk, credit expansion, liquidity risk, financial stability.

JEL classification: E320, G210 DOI: 10.32680/2409-9260-2021-5-6-282-283-17-26

УДК: 336.71:330.101.54

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