SYSTEMICALLY IMPORTANT BANKS IN THE DEVELOPMENT OF THE ECONOMY OF UKRAINE
UDC 336.711:330.3(477)
BURA Vitalina,
Postgraduate Student at the Department of banking Kyiv National University of Trade and Economics
SYSTEMICALLY IMPORTANT BANKS IN THE DEVELOPMENT OF THE ECONOMY OF UKRAINE
Background. Increasing attention of regulators and scientists to the problem of the existence of "systemically important banks" (SIBs) was caused by the global economic crisis of 2008–2009 and by the bankruptcy of "too big" banks of US. In Ukraine, the problem became especially important during the banking crisis 2014–2016, which revealed an acute need to define the practical significance of the activities of SIBs.
Analysis of recent research and publications showed that despite significant scientific contribution of foreign and domestic researchers on the research topic, definition of the role and place of SIBs in Ukraine's banking sector needs further development considering present changes, it substantiates the relevance of the research.
The aim of the article is to determine the role and place of systemically important banks in the banking system of Ukraine.
Materials and methods. The article is based on the dialectical method and on systematic, historical and logical approaches to the study of the role of SIB in the banking sector of Ukraine. In the process of research, the following methods were used: analysis and synthesis, induction and deduction, comparative analysis, statistical and graphic.
Results. Activation processes of concentration and consolidation of the banking system of Ukraine over the last three years has become a prerequisite to the future extension of the list of SIBs. Currently, potential systemically important banks (PSIBs), in our view, are Alfa Bank, Ukrsotsbank and Ukrgasbank. These banks due to the approaching of their activities to the level of systemic importance and to the projected increasing their potential have to get the status of SIBs within a few years. Therefore, the object of this study are both SIBs and PSIBs.
Determination of the place and role of SIBs and PSIBs in Ukraine's banking sector was carried out taking into account signs of systemic importance: "size" and "importance" and their social significance. Thus, three SIBs concentrated 44 % of loans, 48 % of assets, 48 % of funds of clients, 50 % of commitments and 57 % funds of individuals, 58 % offices and 70 % of the payment infrastructure of the banking system of Ukraine. In addition, increases the role of not only of SIBs, but PSIBs as well in the banking market, which increases the burden on the state budget.
In this situation, SIBs became socially significant and "extremely important" banks to the banking system of Ukraine. Their potential can be used to address tasks, which are identified by Complex program of development of financial sector of Ukraine till 2020 and the Basic principles of monetary policy in 2017 and the medium term.
However, significant size of SIBs activities provoke problems in ensuring economic competition and stability in the banking market. This paper develops set of recommendations for regulators Ukraine .
Conclusion. It was determined that SIBs accumulate significant amounts of savings, promote economic development through loaning, create jobs and contribute to the formation of public confidence in banks. However, activities of SIBs leads to violation of economic competition in the banking market of Ukraine, they occupy monopoly (dominant) position and generate moral hazard that could cost the state more than 15 % of government revenue. The main task of regulators at the moment is to develop and implement a number of measures to maximize the positive and minimize the negative impact of SIBs.
Keywords: systemically important bank, potential systemically important bank, concentration, consolidation, monopoly position.
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BURA Vitalina,
Postgraduate Student at the Department of banking Kyiv National University of Trade and Economics
SYSTEMICALLY IMPORTANT BANKS IN THE DEVELOPMENT OF THE ECONOMY OF UKRAINE
Background. Increasing attention of regulators and scientists to the problem of the existence of "systemically important banks" (SIBs) was caused by the global economic crisis of 2008–2009 and by the bankruptcy of "too big" banks of US. In Ukraine, the problem became especially important during the banking crisis 2014–2016, which revealed an acute need to define the practical significance of the activities of SIBs.
Analysis of recent research and publications showed that despite significant scientific contribution of foreign and domestic researchers on the research topic, definition of the role and place of SIBs in Ukraine's banking sector needs further development considering present changes, it substantiates the relevance of the research.
The aim of the article is to determine the role and place of systemically important banks in the banking system of Ukraine.
Materials and methods. The article is based on the dialectical method and on systematic, historical and logical approaches to the study of the role of SIB in the banking sector of Ukraine. In the process of research, the following methods were used: analysis and synthesis, induction and deduction, comparative analysis, statistical and graphic.
Results. Activation processes of concentration and consolidation of the banking system of Ukraine over the last three years has become a prerequisite to the future extension of the list of SIBs. Currently, potential systemically important banks (PSIBs), in our view, are Alfa Bank, Ukrsotsbank and Ukrgasbank. These banks due to the approaching of their activities to the level of systemic importance and to the projected increasing their potential have to get the status of SIBs within a few years. Therefore, the object of this study are both SIBs and PSIBs.
Determination of the place and role of SIBs and PSIBs in Ukraine's banking sector was carried out taking into account signs of systemic importance: "size" and "importance" and their social significance. Thus, three SIBs concentrated 44 % of loans, 48 % of assets, 48 % of funds of clients, 50 % of commitments and 57 % funds of individuals, 58 % offices and 70 % of the payment infrastructure of the banking system of Ukraine. In addition, increases the role of not only of SIBs, but PSIBs as well in the banking market, which increases the burden on the state budget.
In this situation, SIBs became socially significant and "extremely important" banks to the banking system of Ukraine. Their potential can be used to address tasks, which are identified by Complex program of development of financial sector of Ukraine till 2020 and the Basic principles of monetary policy in 2017 and the medium term.
However, significant size of SIBs activities provoke problems in ensuring economic competition and stability in the banking market. This paper develops set of recommendations for regulators Ukraine .
Conclusion. It was determined that SIBs accumulate significant amounts of savings, promote economic development through loaning, create jobs and contribute to the formation of public confidence in banks. However, activities of SIBs leads to violation of economic competition in the banking market of Ukraine, they occupy monopoly (dominant) position and generate moral hazard that could cost the state more than 15 % of government revenue. The main task of regulators at the moment is to develop and implement a number of measures to maximize the positive and minimize the negative impact of SIBs.
Keywords: systemically important bank, potential systemically important bank, concentration, consolidation, monopoly position.
FREE FULL TEXT (PDF)