FINANCIAL RISK MANAGEMENT AS A STRATEGIC DIRECTION FOR IMPROVING THE LEVEL OF ECONOMIC SECURITY OF THE STATE

Abstract

The purpose of the paper is to generalize theoretical and methodological principles and develop practical recommendations aimed at improving financial risk management as a strategic direction for improving the level of economic security in Ukraine. Methodology. The methodology for this study was based on methods of scientific abstraction, methods of the system-functional approach, grouping, generalization and formalization, systematization, analysis and synthesis, statistical and economic methods, peer review. Results. It is proved that the economic essence of financial risk management as a strategic direction for improving the level of economic security consists in the permanent and continuous application of procedures for communication and definition of management context (management goals, distribution sector, list of criteria to be taken into account in the management process), management policy, as well as selection, comprehensive analysis, quantification and processing of financial risks (allocation of alternative ways to reduce the impact), which are characterized by specific characteristics of financial sector risks. The present situation of the financial environment of the financial sphere is analysed by calculating indicators and generalizing them in the integral index which dynamics in 2011–2017 tends to deteriorate values. This means lowering the level of financial security. The method of quantitative assessment of financial risks through reasonable algorithm is improved. It consists of the following stages: analysis of indicators of the state of financial security structured according to its subsystems; assessment of the level of financial risks in the system of economic security; comprehensive risk assessment in financial security subsystems; definition of the integral index of financial risks in the system of economic security. Directions of financial risk management in the system of economic security are generalized and their groupings are organized according to distinct subsystems of economic security in Ukraine. The mechanism of financial risk optimization is substantiated. It provides a description of the process of achieving the optimal characteristics of identified financial risks in subsystems of economic security. Its purpose is to minimize social and economic consequences of the destructive impact of the risk environment and improve the overall state of economic security of the country and society. Practical implications. The practical significance of the obtained results is the proven and justified feasibility of using proposed recommendations in the field of financial risk management to improve the level of economic security in Ukraine and a mechanism for optimizing financial risks, which describes the process of achieving the optimal characteristics of identified financial risks in the subsystems of economic security. Value/originality. The information base of the article is the legislative and regulatory documents, consolidated data of the State Fiscal Service of Ukraine, the State Statistics Service of Ukraine, Ministry of Finances of Ukraine, the National Bank of Ukraine, Ministry of Economic Development and Trade of Ukraine, periodicals and reference publications, Internet resources, and results of authors’ studies and calculations.