Modeling of the financial system?s stability on the example of Ukraine
DOI:
https://doi.org/10.24136/eq.2021.014Keywords:
financial institute, financial market, stock market, financial depth, assets, efficiencyAbstract
Research background: Financial stability is one of the key tasks in the functioning of the country?s financial system. National financial systems have significant differences in the level of their development, structure and approaches to regulation. There are no uniform world standards for methods and indicators of assessing financial stability. International financial institutions, including the International Monetary Fund, only outline certain areas and offer an indicative list of indicators that should be taken into account.
Purpose of the article: Taking into account the peculiarities of the subject and object structure of Ukraine?s financial system, this study formed groups of indicators that reflect the state of financial depth, level of access and efficiency of the financial system, systematized by subject (financial institutions) and object financial markets) characteristics.
Methods: The basis for the formation of a set of indicators is a matrix of characteristics of the financial system?s stability, which is formed according to the principle of 4x2 proposed by experts of the International Monetary Fund. The list of indicators to calculate the integrated indicator that characterizes the stability of the financial system of Ukraine, covers the period 2007?2019 and includes 29 indicators that take into account the peculiarities of its formation and development. Harrington?s desirability function is used to determine the integrated indicator that characterizes the state of financial stability.
Findings & value added: The intermediate calculations obtained by modeling groups of indicators showed that the level of access to the financial system and the state of its depth are balanced during the study period (the range of variation of integrated indicators for these groups is minimal ? from 0.1 to 0.18), is at a satisfactory level and the basis for ensuring the financial system?s stability. Conversely, the efficiency of the financial system is low, and characterized by a high degree of volatility (range of variation ? 0.51). The obtained integrated indicator, which is in the range from 0.41 to 0.54 on the Harrington desirability scale, makes it possible to assess the state of the financial system?s stability in Ukraine as satisfactory, but with a high level of sensitivity to both external and internal shocks.
Downloads
References
Almahadin, H. A., Kaddumi, T., & AL-Kilani, Q. (2020). Banking soundness-financial stability nexus: empirical evidence from Jordan. Banks and Bank Systems, 15(3), 218?227. doi: 10.21511/bbs.15(3).2020.19.
DOI: https://doi.org/10.21511/bbs.15(3).2020.19
View in Google Scholar
Bilan Y., Mishchuk, H., Roshchyk, I., & Joshi, O. (2020a). Hiring and retaining skilled employees in SMEs: problems in human resource practices and links with organizational success. Business: Theory and Practice, 21(2), 780?791. doi: 10.3846/btp.2020.12750.
DOI: https://doi.org/10.3846/btp.2020.12750
View in Google Scholar
Bilan, Y., Mishchuk, H., Roshchyk, I., & Kmecova I. (2020b). Analysis of intellectual potential and its impact on the social and economic development of european countries. Journal of Competitiveness, 1, 22?38. doi: 10.7441/joc.2020. 01.02.
DOI: https://doi.org/10.7441/joc.2020.01.02
View in Google Scholar
Blahun, I. S., Blahun, I. I., & Blahun, S. I. (2020). Assessing the stability of the banking system based on fuzzy logic methods. Banks and Bank Systems, 15(3), 171?183. doi: 10.21511/bbs.15(3).2020.15.
DOI: https://doi.org/10.21511/bbs.15(3).2020.15
View in Google Scholar
Bogdan, T., & Lomakovych V. (2021). Financialization of the global economy: macroeconomic implications and policy challenges for Ukraine. Investment Management and Financial Innovations, 18(1), 151?164. doi: 10.21511/imfi.18 (1).2021.13.
DOI: https://doi.org/10.21511/imfi.18(1).2021.13
View in Google Scholar
Brůha, J., & Kočenda, E. (2018). Financial stability in europe: Banking and sovereign risk. Journal of Financial Stability, 36, 305?321. doi: 10.1016/j.jfs.2018. 03.001.
DOI: https://doi.org/10.1016/j.jfs.2018.03.001
View in Google Scholar
Bukhtiarova, A., Semenog, A., Razinkova, M., Nebaba N., & Haber J.A. (2020). Assessment of financial monitoring efficiency in the banking system of Ukraine. Banks and Bank Systems, 15(1), 98?106. doi: 10.21511/bbs.15(1).20 20.10.
DOI: https://doi.org/10.21511/bbs.15(1).2020.10
View in Google Scholar
Chernadchuk, V., Sukhonos, V., & Shkolnyk, I. (2017). The notion and content of financial system in the context of financial law of Ukraine. Problems and Perspectives in Management, 15(2), 234?245. doi: 10.21511/ppm.15(2-1).2017.07.
DOI: https://doi.org/10.21511/ppm.15(2-1).2017.07
View in Google Scholar
Chornovol, A., Tabenska, J., Tomniuk, T., & Prostebi, L. (2020). Public finance management system in modern conditions. Investment Management and Financial Innovations, 17(4), 402?410. doi: 10.21511/imfi.17(4).2020.34.
DOI: https://doi.org/10.21511/imfi.17(4).2020.34
View in Google Scholar
Čihák, M., Demirgüç-Kunt, A., Feyen, E., & Levine, R. (2012). Benchmarking financial systems around the world. World Bank, Policy Research Working Paper, 6175.
DOI: https://doi.org/10.1596/1813-9450-6175
View in Google Scholar
Crockett, A. (1997). Why is financial stability a goal of public policy? Economic Review, 82 (Q IV), 5?22.
View in Google Scholar
Faryna, ?., & Dadashova, ?. (2015). Contemporary approaches to the stability of the financial system of the country. Ekonomichnyi analiz, 20, 210?217.
View in Google Scholar
Foot, M. (2003). Protecting financial stability-how good are we at it? Speech Given at University of Birmingham. 6 June. Retrieved from http://www.fsa.gov.uk/ Pages/Library/Communication/Speeches/2003/sp133.shtml.
View in Google Scholar
Frolov, S., & Shukairi, F. (2020). Bank-centric nature of the financial system of Ukraine: analysis of the current situation. Banks and Bank Systems, 15(3), 184?198. doi: 10.21511/bbs.15(3).2020.16.
DOI: https://doi.org/10.21511/bbs.15(3).2020.16
View in Google Scholar
Golemi, E. (2020). Analysis of the effects of macroprudential measures on GDP?s trend ? simulation using a macro financial model for Albania. Lecture Notes in Networks and Systems, 91, 615?623. doi: 10.1007/978-3-030-32015-7_69.
DOI: https://doi.org/10.1007/978-3-030-32015-7_69
View in Google Scholar
Gospodarchuk, G., & Amosova, N. (2020). Geo-financial stability of the global banking system. Banks and Bank Systems, 15(4), 164?178. doi: 10.21511/bbs.1 5(4).2020.14.
DOI: https://doi.org/10.21511/bbs.15(4).2020.14
View in Google Scholar
Gospodarchuk, G., & Suchkova, . E. (2019). Financial stability: problems of inter-level and cross-sectoral equilibrium. Equilibrium. Quarterly Journal of Economics and Economic Policy, 14(1), 53?79. doi: 10.24136/eq.2019.003.
DOI: https://doi.org/10.24136/eq.2019.003
View in Google Scholar
International Monetary Fund (2006). Financial soundness indicators compilation guide. doi: 10.5089/9781589063853.069.
DOI: https://doi.org/10.5089/9781589063853.069
View in Google Scholar
International Monetary Fund (2019). Financial soundness indicators compilation guide. Retrieved from https://www.imf.org/en/Data/Statistics/FSI-guide
View in Google Scholar
International Monetary Fund. (2021). Global financial stability report update. Vaccine inoculate markets, but policy support is still. Retrieved from https://www.imf.org/en/Publications/GFSR/Issues/2021/01/27/global-financial-stability-report-january-2021-update
View in Google Scholar
Khalatur, S., Velychko, L., Pavlenko, O., Karamushka, O., & Huba, M. (2021). A model for analyzing the financial stability of banks in the VUCA-world conditions. Banks and Bank Systems, 16(1), 182?194. doi: 10.21511/bbs.16(1). 2021 .16.
DOI: https://doi.org/10.21511/bbs.16(1).2021.16
View in Google Scholar
Kijek, A., & Matras-Bolibok, A. (2020). Technological convergence across European regions. Equilibrium. Quarterly Journal of Economics and Economic Policy, 15(2), 295?313. doi: 10.24136/eq.2020.014.
DOI: https://doi.org/10.24136/eq.2020.014
View in Google Scholar
Kiseľáková, D., Filip, P., Onuferová, E., & Valentiny, T. (2020). The impact of monetary policies on the sustainable economic and financial development in the euro area countries. Sustainability, 12(22), 1?21. doi: 10.3390/su12229367.
DOI: https://doi.org/10.3390/su12229367
View in Google Scholar
Kormilicyna, I. G. (2011). Financial stability: essence, factors, indicators. Finansy i kredit, 35(467), 44?54.
View in Google Scholar
Kozmenko, S. ?., Korneyev, M. V., & Makedon, V. V. (2014). Financialisation of economy and its influence on the indicators of countries? socioeconomic development. Actual Problems of Economics, 161(11), 290?298.
View in Google Scholar
Kuznyetsova, A., & Pogorelenko, N. (2018). Assessment of the banking system financial stability based on the differential approach. Banks and Bank Systems, 13(3), 120?133. doi: 10.21511/bbs.13(3).2018.12.
DOI: https://doi.org/10.21511/bbs.13(3).2018.12
View in Google Scholar
Padoa-Schioppa, T. (2002). Central banks and financial stability: exploring a land in between. In Second ECB central banking conference ?The transformation of the European financial system?. Frankfurt am Main.
View in Google Scholar
Pennesi, F. (2021). Equivalence in the area of financial services: an effective instrument to protect EU financial stability in global capital markets? Common Market Law Review, 58(1), 39?70.
DOI: https://doi.org/10.54648/COLA2021003
View in Google Scholar
Sahoo, S. (2014). Financial intermediation and growth: bank-based versus market-based systems. Journal of Applied Economic Research, 8(2), 93?114. doi: 10. 1177/0973801013519998.
DOI: https://doi.org/10.1177/0973801013519998
View in Google Scholar
Samokhvalov, Y. Y., & Burba, O. I. (2018). Evaluation of the effectiveness of scientific and scientific-technical projects based on the generalized Harrington function. Systemy upravlinnia, navihatsii ta zviazku, 4(50), 77?85.
DOI: https://doi.org/10.26906/SUNZ.2018.4.077
View in Google Scholar
Schinasi, G. J. (2005). Preserving financial stability. International Monetary Fund. Economic Issues, 36.
DOI: https://doi.org/10.5089/9781589064997.051
View in Google Scholar
Shi, J., Yang, W., & Liu, W. (2014). The measure of financial market stability based on quantile regression. Xitong Gongcheng Lilun Yu Shijian/System Engineering Theory and Practice, 34, 92?99.
View in Google Scholar
Shkolnyk, I., Kozmenko, S., Kozmenko, O., & Mershchii, B. (2019). The impact of economy financialization on the level of economic development of the associate eu member states. Economics and Sociology, 12(4), 43?58. doi: 10.14254 /2071-789X.2019/12-4/2.
DOI: https://doi.org/10.14254/2071-789X.2019/12-4/2
View in Google Scholar
Shkolnyk, I., Kozmenko, S., Polach, J., & Wolanin, E. (2020). State financial security: comprehensive analysis of its impact factors. Journal of International Studies, 13(2), 291?309. doi: 10.14254/2071-8330.2020/13-2/20.
DOI: https://doi.org/10.14254/2071-8330.2020/13-2/20
View in Google Scholar
Vitvitskiy, S., Kurakin, O., Pokataev, P., Skriabin, O., & Sanakoiev, D. (2021). Formation of a new paradigm of anti-money laundering: the experience of Ukraine. Problems and Perspectives in Management, 19(1), 354?363. doi: 10.21511/ppm.19(1).2021.30.
DOI: https://doi.org/10.21511/ppm.19(1).2021.30
View in Google Scholar
Zhuravka, F., Filatova, H., Podmarov, O., Aldiwani, K., & Shukairi, F. (2018). State?s debt sustainability management: case of Ukraine. Public and Municipal Finance, 7(4), 1?7. doi: 10.21511/pmf.07(4).
DOI: https://doi.org/10.21511/pmf.07(4).2018.01
View in Google Scholar
Zhuravka, F., Filatova, H., Šuleř, P., & Wołowiec T. (2021). State debt assessment and forecasting: time series analysis. Investment Management and Financial Innovations, 18(1), 65?75. doi: 10.21511/imfi.18(1).2021.06.
DOI: https://doi.org/10.21511/imfi.18(1).2021.06
View in Google Scholar
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2021 Equilibrium. Quarterly Journal of Economics and Economic Policy
This work is licensed under a Creative Commons Attribution 4.0 International License.
