Innovations in strengthening the stability of European Union banks and their synchronization in Ukraine

Abstract

Introduction. The European Commission took a new step in the development of the system of financial security of banking sector and protection of the interests of depositors and creditors of banks, approving Document 52023DC0225 “On the review of the crisis management and deposit insurance framework contributing that completing the Banking Union”, which, together with the previously created regulatory framework, are extremely useful for Ukraine in order to harmonize financial legislation with the requirements of the European Union. Problem Statement. Determining the vectors of development, the system of banking regulation and supervision, guaranteeing deposits of various categories of bank` clients in the countries-members of the European Union, as well as preparing recommendations for synchronizing this experience in Ukraine. Purpose. Disclosure of modern trends in reforming the system of banking regulation and supervision, protection of bank depositors in EU countries, as well as outlining prospects for further use of this experience in Ukraine. Methods. General scientific and special methods of analysis, synthesis, grouping, description, comparison, calibration of important elements, abstract and logical, generalization are used. Results. Three pillars are defined, on which the unified system of banking regulation and supervision in the EU member states is based; the concept of “Resolution” in relation to banks is analyzed; the genesis of the EU legislation regarding banks recover and liquidation has been recreated, taking into account the innovations in 2023; a comparative analysis of the approaches of the EU and Ukraine regarding the rehabilitation/liquidation of banks and the banks deposit guarantee system is carried out; conceptual directions for the development of Ukrainian legislation in this area are proposed. Conclusions. The European Union continues to adopt measures aimed at strengthening the financial stability of the Banking Union and increasing trust in banks of all economic entities. The EU is developing a new vector of financial policy aimed at early diagnosis of bank problems, introduction of an adequate crisis management system as opposed to their preventive liquidation. The range of coverage by the deposit guarantee system is expanding not only for the population, but also for businesses, pension funds, municipalities and other bodies, while maintaining the maximum compensation amount of EUR 100,000. The introduction of this approach and other innovations in the system of guaranteeing banking financial security in Ukraine should be considered in the post-war period. At the same time, in our opinion, it would be expedient to form: a fund guaranteeing deposits of socially significant organizations and enterprises with a limit on the size of the maximum compensation; the mechanism of resolution of banks with the corresponding financing fund; the system of early replacement of the management of problem banks and the bail-in mechanism.