RISKS OF THE BANKING SYSTEM OF UKRAINE IN THE CONDITIONS OF MARTIAL LAW

Abstract

Introduction. The peculiarities of the manifestations of credit, market and currency risks, liquidity risks and risks of "state failure" for the functioning of the banking system of Ukraine in the conditions of martial law were examined the article. Recommendations are offered for minimizing existing risks and restoring the functionality of the banking system in the context of performing financial intermediation functions. Methods. Traditional methods of scientific knowledge were used in the article. In particular, methods of analysis and synthesis, as well as a graphic method for visualization and comparison of trends of certain indicators, were used to study the main trends of the risks of banking activity under martial law. Methods of generalization and abstraction were used to formulate recommendations for minimizing banking risks during martial law. Results. In the course of the study, it was proved that the credit risk in the conditions of martial law is minimal for the banking system of Ukraine, because as a result of ineffective monetary policy, the credit burden on the national economy is minimal and insufficient for its recovery. The negative impact of currency and market risks on the functioning of the banking system of Ukraine is substantiated. It is proved that due to the use of the monetary regime of inflation targeting, the banking system of Ukraine has lost the ability to implement the investment function and the functions of financial intermediation in general. Disscussion. As a result of the state of war and the negative expectations of economic agents, the short-term deposit base of banks will increase, and the volume of deposits will decrease, which may lead to a liquidity crisis in the banking system, however, the uninterrupted functioning of the banking system of Ukraine in terms of settlement and cash services will be preserved due to the high level of concentration of capital and banking assets owned by the state. In order to minimize the negative impact of banking risks, the NBU should resort to the use of mechanisms for targeted cheap long-term refinancing of banks under specific economic development programs, which will allow restoring the intermediary functions of the banking system. Keywords: credit risk, currency risk, liquidity risk, market risk, “state failure” risk, refinancing, lending, monetary policy.