The Anti-Crisis Measures of Bank Liquidity Management in the Conditions of Martial Law in Ukraine

Abstract

The aim of the article is to study the features of the use of anti-crisis monetary instruments to support liquidity at the macro level and ensure financial stability in Ukraine in the context of the ongoing full-scale military invasion of the russian federation. The NBU is facing new challenges and tasks related to maintaining the functional capacity of banks, prudent actions aimed at supporting liquidity and financial stability of the banking system. It has already been proved that both a shortage and a surplus of liquidity can be the starting point of a shock explosion in the economy. A comparative-dynamic analysis of the main monetary indicators of the money sphere has been carried out, which has shown their dynamism, controllability, and relative stability. It is noted that in the context of the «unattainable triad», or the Mundell-Fleming trilemma, an independent monetary policy was introduced with respect to the currency, but under the influence of non-monetary factors influencing the monetary sphere, there is a twisting of the spiral of liquidity and the formation of its surplus. Transactions with government bonds and certificates of deposit, which, unlike government bonds, are not a socially useful transaction, do not always achieve the goals of ensuring financial stability and liquidity management under martial law. Monetary transmission in the government securities market does not have a positive effect due to the mandatory military spending of the government of Ukraine. For banks, these operations are a source of profitable liquidity. Due to the non-working transmission mechanism, the inconsistency of the actions of the government and the central bank, in particular, the dynamics of the interest rate does not have a stabilizing effect on the economy.