COMPETITIVENESS OF THE BANKING SECTOR OF UKRAINE: ITS NATURE AND FORMATION MECHANISM
Main Article Content
Abstract
Introduction. Most emerging market countries have a bank-centric financial sector. Ukraine is no exception, so it is quite natural that the banking sector should play the role of financial intermediary and ensure the formation of sufficient investment resources for economic development. Unfortunately, the Ukrainian banking sector has not been able to fully integrate into the world financial system for almost 30 years. Domestic banks have failed to become not only competitive participants in international financial services and capital markets, but also reliable participants in domestic economic processes and a driver of economic growth. Today, this problem is especially acute, because the banking system, which, in fact, represents the entire financial sector, needs strong financial support to restart the economy and its entry into the trend of recovery and growth. It is the banking sector that can become a powerful source of attracting foreign investment resources, alternative loans from international financial organizations, which Ukraine is forced to attract today. Solving this problem requires strengthening the competitiveness of the entire banking sector, but it is necessary to begin with the full restoration of its work in terms of functions performed by banks, in particular, providing credit support to the economy.
Under such conditions, the need to develop effective mechanisms for managing the competitiveness of the domestic banking sector increases, in particular, in terms of strengthening its ability to ensure reliable, smooth and efficient performance of financial intermediary functions, attract foreign investment and compete effectively in international financial markets. This will allow building a reliable and stable banking system that will be a driver of socio-economic development of the country, in particular, by creating a channel to attract external financial resources, an alternative to credit lines of international financial organizations.
The formation of a competitive banking sector will contribute not only to strengthening the competitiveness of the entire financial system, but also to ensuring the financial stability of the state and the entire national economy. The manifestation of this will be the growth of foreign capital, strengthening the capitalization and market liquidity of banking institutions, increasing the share of long-term investments in the economy, attracting modern and safe banking technologies and financial services and more..
Purpose. The purpose of the article is to substantiate the theoretical and methodological foundations of studying the mechanism of forming of the competitiveness of the banking sector of Ukraine, as a basis for further development of scientific and practical recommendations for improving its management mechanism in the context of deepening integration of the Ukrainian financial sector.
Results. It is revealed that hat the level of competitiveness of the banking sector is formed under the influence of a set of factors. Therefore, the studied concept should be considered as an integral characteristic. The existing theoretical and practical approaches to managing the competitiveness of the banking sector are at the stage of their formation. As a result, there are disproportions in the development of the banking system and inefficient performance by banks of their main function funding the economy. Therefore, in Ukrainian realities, the competitiveness of the banking sector should be understood primarily as its ability to effectively perform its functions of funding the economy and counteracting risks, both internal and external.
Originality. Theoretical approaches to substantiation of the nature and mechanisms of formation of competitiveness of the banking sector of Ukraine have been further developed. It has been revealed that the existing theoretical and practical approaches to managing the competitiveness of the banking sector are at the stage of their formation. It has been established that as a result of the existing disparities in the development of the banking system of Ukraine, banks do not perform their main function - funding the national economy. Therefore in Ukrainian reality the concept of competitiveness of the banking sector should be considered as the proper fulfillment by banks of their main role - funding the economy and confronting internal and external risks.
Conclusion. Based on the study of the theoretical foundations of the concept of competitiveness of the banking sector it was found that an important component of the mechanism of formation of the competitiveness of the banking sector is the environment of its activities. That is, a set of macroeconomic conditions and reasons that reflect the influence of the phase of the economic cycle, the state and conjuncture of world markets, domestic socio-political processes, etc. At the same time, this characteristic is a latent value, that is one that cannot be directly measured, but is manifested through other characteristics, in particular: efficiency (profitability), capital adequacy and its quality, liquidity and solvency, and investment attractiveness of banks. That is, the competitiveness of the banking sector is an integral characteristic, the assessment of which involves the use of systems of indicators and indicators of the state of its components and the environment of banks.
As a key component of Ukraine's financial system, the banking sector plays an important role in ensuring the functioning of the entire economic mechanism, therefore, it is the banks that have the function of forming the investment resources necessary for economic development. Acting as a financial intermediary between economic agents, banks are deeply integrated into the system of economic relations and become dependent on the financial condition of their customers, which depends on the macroeconomic situation in the country.
Assessing the current level of competitiveness of the banking sector of Ukraine, it is first necessary to analyze the conditions in which the banking system had to operate over the past three years. They were extremely difficult. For most banks, the task of strengthening their own competitiveness was basically in maintaining solvency and preventing bankruptcy. At the same time, bank management, owners and investors understood that the measures taken by the banking regulator are aimed at resolving fundamental imbalances inherent in the Ukrainian banking system and changing the distorted business model of banking that has been built throughout almost 30 years of Ukraine’s independency. Without solving these problems, it is impossible to build a banking sector that will be competitive both at the level of the national economy and at the international level.
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