IMPROVING THE MECHANISM OF IDENTIFICATION AND RECOGNITION OF BANKING GROUPS IN UKRAINE
Journal Title: Проблеми системного підходу в економіці - Year 2017, Vol 4, Issue 60
Abstract
Identification and recognition by the regulator of banking groups operating in the territory of Ukraine is the starting point for predicting, assessing and managing the risks of the banking system whose source is consolidated bank capital. This issue becomes particularly topical at the times of aggravation of crisis phenomena caused both by internal and external processes. The authors have analysed the Regulation on the Procedure for the Identification and Recognition of Banking Groups, approved by the Resolution of the Board of the National Bank of Ukraine dated 09.04.2012 No. 134 which is the basis for the implementation of supervision on a consolidated basis in Ukraine. The authors proved that the process of identification and recognition by the National Bank of Ukraine of banking groups is rather complex and time-consuming. Furthermore, the difference between the terms "identification" and "recognition" has been proved. It was found out that in Ukraine there are different lists of banking groups, namely 1) identified groups and 2) recognized groups. The authors have compiled a list of banks of foreign banking groups that operate in the territory of Ukraine determined by their owners. The article also includes information on recognition of banking groups by the NBU. The peculiarities of banking regulation and supervision on individual and consolidated basis, carried out by the NBU, have been outlined. The forms of statistical reporting submitted by the responsible persons of the banking groups to the NBU have been reviewed, which reveal information on compliance with the requirements to the adequacy of regulatory capital and economic standards by a banking group and its subgroups. A particular attention was also paid to highlighting the forms of regulation (administrative and indicative). The authors suggested the division of banking groups operating in the territory of Ukraine according to the criterion of specificity of consolidated supervision. It was proved that, apart from positive consequences for our banking system, the activity of foreign banking groups in Ukraine is also associated with potential specific risks which in the future may lead to a partial loss of control of the NBU over the national banking and financial systems.
Authors and Affiliations
T. H. Savchenko, L. M. Mynenko
Keywords
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