PECULIARITIES OF FUNCTIONING OF THE BANKING SYSTEM OF UKRAINE

Abstract

The state of the banking system indicates the level of prosperity in the country. The financial and economic crisis has provoked a significant outflow of funds from banking system and the growth of non-performing loans, which led to a deterioration in liquidity and solvency of banks and, accordingly, significantly affected their financial stability. The purpose of the article is to determine the features of the banking system of Ukraine and trends in its further development. The banking sector is influenced by a set of factors: the general political and economic situation in the country, the development of the securities market and the interbank market, the organization of the refinancing system, the effectiveness of regulatory functions of the central bank. Strikes, natural disasters, military conflicts, revolutionary, political and economic events are also extraordinary factors. The aggravation of the political crisis, inconsistency and inconsistency of public policy make the economic crisis in the country even deeper and longer. It is political stabilization that should be the catalyst for the resumption of economic growth. Another important factor that has a strong impact on the economic situation in the economy as a whole and on the functioning of the banking system is the COVID-19 Pandemic. A key factor in the functioning of the banking system of Ukraine in the COVID-19 pandemic is the change in the discount rate as an element of monetary policy of the National Bank of Ukraine. Methodology. The main indicators of banking institutions are analyzed, in particular: the dynamics of changes in the number of Ukrainian banks, the number of structural units of banks, TOP-10 banking institutions in 2021, the dynamics of changes in Ukraine's discount rate in recent years, financial results of Ukrainian banks. It was found that the decrease in the number of banking institutions led to a significant reduction in the number of branches, in particular, most branches were closed by state-owned banks and PrivatBank, but new branches were opened exclusively by private banks. Analyzing the state of the banking services market in terms of raising funds from individuals, dynamics of monetary deposits of the population for the last not a few years show an increase in trust citizens to banks and the interest of bankers to increase in the share of attracted funds of the population in their assets. Changes in the financial market affect the competitive position of banks, which requires rapid adaptation to existing conditions and accumulate all efforts to maintain their own solvency and stability of the banking system. Results. The results show that the changes that took place in the banking system during the COVID-19 pandemic and the full-scale war require the development of possible scenarios for the development of Ukraine's banking system in the future. To restore the banks caused by the banking crisis, it is necessary to use such tools as: maintaining liquidity as a "lender of last resort", reducing required reserves, a diversified approach to setting economic standards. Based on the optimistic scenario and using adaptive and regulatory approaches, as well as taking into account the influence of endogenous and exogenous factors, the projected indicators of development of the banking system of Ukraine have been developed.