The authors analyze the state of international banking business before and after the global economic crisis of 2007-2009, and make predictions on potential future effects of the ongoing COVID-19 pandemic on transformation of international banking and bank strategy. The analysis focuses on trends and changes in the two most important forms of trade in banking services, namely, cross-border banking flows, which include direct cross-border banking flows and local banking flows of international banks’ subsidiaries abroad, and foreign bank presence. It has been concluded that direct cross-border banking flows are more volatile than local banking flows of foreign banks during economic and social upheavals. The period under study has witnessed large increase in foreign bank presence, both in terms of number and local market share. The study determines changes of leading international banks and their home countries, highlighting the weakening position of banks from advanced countries and increase in the role of banks from emerging markets and developing countries. The authors review international expansion strategies of major banks from the post-Soviet states, that are influenced both by the opportunities and goals of banks going abroad, and by the institutional features of their banking systems; countries which these banks are targeting are predominantly comparable to the post-Soviet states in terms of economic development, and are chosen by criteria of their attractiveness, such as high level of trade and political relations with the bank’s home country, the presence of diaspora, the degree of saturation and growth dynamics of the banking market in the host country. The reasons behind the banks’ geographical expansion decision include, among many others, the dramatic growth of their economies, stimulated by the involvement in globalization processes, and liberal banking reforms. Obstacles of economic and non-economic nature that are hindering this expansion, encompass high level of competition in external banking markets, expensive financial resources of domestic banks, low level of expansion of the post-Soviet states-based enterprises to the non-post-Soviet states, discriminatory qualification requirements for personnel and composition of management bodies, problems related to banking licensing procedures and requirements, aspects of culture and communication; their transformation from local banks, operating in the local market, to banks with a clear manifestation of the tendency of their international expansion amidst changing global environment and uncertainty.

The article is devoted to the study of the banking business' internationalization impact on financial markets, which is especially implemented in developing countries, primarily in post-communist states. The reasons for foreign banks to conquer new markets in this region have been the subject of numerous studies. The article's novelty is the comparative analysis of the banking systems' internationalization in Azerbaijan and Ukraine, through both theoretical and econometric aspects. As a result of existing concepts of banking internationalization's generalization, three generic features were identified: economies of scale, competitive advantage over local banks, customers' financial behavior; based on this, the systematics for theoretical support of this process is proposed. Based on the comparison of foreign-owned banks share in developed and emerging countries, it is concluded a presence of the fundamental international banking business' expansion in developing countries on the eve of the global financial crisis, which served as an aggravating circumstance in the spread of negative consequences. The level of deposits dollarization and foreign exchange Loans-to-Deposits Ratio proves the key role of international banks in provoking currency credit expansion in both countries; in Ukraine this expansion (due to central bank's irrational actions in foreign exchange regulation) has grown into a credit boom, which especially negatively affected the global financial crisis flow in the state. For empirical confirmation of these assumptions, the economic analysis of banking systems internationalization and development indicators in Azerbaijan and Ukraine was realized through VAR-modeling. The key factors were: cross-border net position of international banks for residents of these countries, system's capitalization, Loans-to-Deposits Ratio, share of deposits in bank passives and the actual banking multiplier. The analysis substantiates the significant impact of international banking business on the state of the banking systems, the degree of which depends on the type of trade policy.

ISRA (India) = 1.344 ISI (Dubai, UAE) = 0.829 GIF (Australia) = 0.564 JIF = 1.500 SIS (USA) = 0.912 РИНЦ (Russia) = 0.156 ESJI (KZ) = 4.102 SJIF (Morocco) = 2.031 ICV (Poland) = 6.630 PIF (India) = 1.940 IBI (India) = 4.260

В статье рассматриваются экономико-правовые аспекты участия иностранного капитала в банковском секторе Азербайджана. Представлены практические подходы к организации данного процесса. Определены критерии оптимального регулирования границ деятельности иностранного капитала в работе местных банков. Отмечена важность совершенствования существующей законодательной базы, регулирующей участие иностранного капитала в банковском секторе страны. Исследованы процессы и процедуры подготовки и принятия нормативных актов по регулированию участия иностранного капитала в структуре национальных банков в контексте глобальных экономических вызовов. Обоснована важность разработки и оптимизации правовых основ и механизмов, регулирующих участие иностранного капитала в банковском секторе Азербайджана, для защиты интересов местных коммерческих банков. Акцентировано на необходимость гармонизации интересов иностранных инвесторов и отечественных кредитных учреждений в целях обеспечения финансовой стабильности банковского сектора страны и определения оптимальных законодательных границ. Проанализированы основные положения действующего законодательства Азербайджана, связанные с рассматриваемыми в статье проблемами. Выделены ключевые моменты для совершенствования действующих нормативно-правовых актов, регулирующих участие иностранного капитала в банковском секторе страны. The article discusses the economic and legal aspects of foreign capital participation in the banking sector of Azerbaijan. Theoretical and methodological base of legal and economic regulation of ensuring participation of foreign capital in the banking sector is analyzed in this context. Practical approaches to the organization of thе said process are presented. The essence and the importance of legal aspects of regulation of foreign capital in a banking system of the country is considered too. The criteria for optimal regulation of foreign capital limits in the activity of local banks are defined. The importance of improving the existing legislative framework governing the participation of foreign capital in the banking sector of the country was noted. The processes and procedures for the preparation and adoption of regulations on the regulation of the participation of foreign capital in the structure of national banks in the context of global economic challenges are investigated. It justifies the importance of developing and optimizing the legal framework and mechanisms governing the participation of foreign capital in the banking sector of Azerbaijan in order, to protect the interests of local commercial banks. The need to harmonize the interests of foreign investors and domestic credit institutions is emphasized in order to ensure the financial stability of the country's banking sector and determine the optimal legislative restrictions. The main provisions of the current legislation of Azerbaijan related to the problems addressed in the article have been analyzed. Key points to improve existing regulations governing the participation of foreign capital in the banking secto...

Research background: Given the fact that multinational banks’ credit activity leads to the accumulation of external debt in the borrowing countries, which potentially contributes to the formation of a debt-type economy, more in-depth research of the scope and consequences of such impact on the example of specific recipients is required. Purpose of the article: The purpose of the article is to develop theoretical and methodological bases of the study of multinational banks’ lending activity in terms of debt-type economy on the example of the countries of Central and Eastern Europe. Methods: A system of general scientific and special research methods, namely, statistical (correlation analysis, in particular), structural-functional and comparative analysis, has been applied to achieve the above-mentioned purpose. Findings & Value added: The results of the study indicate that multinational banks’ direct cross-border lending remains an important source of external debt accumulation and the formation of a debt-type economy in the countries of Central and Eastern Europe. Based on the assessment of the external debt indicators of the countries under the study, it has been determined that they all can be classified as debt-type economies. At the same time, the countries of the group still remain significantly differentiated in terms of relative indicators of direct cross-border lending and external debt. It has been concluded that multinational banks’ aggressive lending strategy during the growth phase in the countries of Central and Eastern Europe has exacerbated the problem of external indebtedness during the recession phase.