Influence of Socio-Institutional and Political Factors on Innovative Development of the Banking Sector
Journal Title: Проблеми економіки - Year 2015, Vol 2015, Issue 3
Abstract
The purpose of the article is to study the impact of major socio-institutional and political factors on innovative development of the banking sector and to work out practical recommendations on their regulation. The article analyzes the influence of the main socio-political and institutional factors, namely, financial literacy and legislative control, on innovative development of the banking sector. It has been determined that these factors not only affect individual participants of the banking market, but also influence the economic development of the state as a whole. The level of financial literacy in Ukraine is inadequate, which has a negative impact on banking risks and reduces perception of innovative banking services. On the other hand, insufficient development of the domestic legislation hinders innovative development of the banking sector. It has been determined that the socio-political factors depend on the degree of risk and expenditures on innovation activities of banking institutions. Therefore, state regulators face the task of ensuring effective and transparent regulatory instruments to facilitate growth of responsibility both of banking institutions and individual consumers of banking services. An important condition in this situation is creating fair competitive environment due to the optimum ratio of macro-prudential supervision and the process of deregulation of the banking market. On the other hand, banks should realize their responsibility to the state and contribute to reducing systemic risks.
Authors and Affiliations
Tetiana Yukhymenko, Olena Lapko
Keywords
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