No abstract

Monetary policy deals with a number of issues including improvement of the national business competitiveness, increasing the volume of internal credits, ensuring stability and sufficient reinvestments into the real sector of the economy. On the one hand, banks issue credits relying on the index of competitiveness. On the other hand, banks should encourage the growth of the organization's competitiveness. These tasks are interconnected, but the latter one is hardly considered by researchers. Administration of companies' competitiveness is a set of financial methods aimed at modifying the activity of regulatory institutions so that they can help companies achieve the required financial criteria. In order to solve the trilemma of competitiveness, monetary policy and credit limit-setting for a group of companies, robust management is necessary. Currently, banks have sufficient liquidity but prefer low credit exposure. Such an approach is conditioned by the recent financial shocks, dissatisfaction and disappointment with the existing methodology, which has not protected banks from risks. It leads to the necessity for banks to introduce credit limits for each company. The authors suggest a model of adjustment of competitiveness drivers for the real sector of the economy and ways to determine credit limits in order to support competitiveness.

Innovation risk in banks, a formalized instrument that is part of banks’ financial and innovative strategies, influences the assessment of innovative activity, demonstrating the importance of forecasting and assessment models of potential innovation risks. Our research into general scientific and specific methods allowed us to: (1) distinguish hierarchical concepts and their order—namely, “banking innovation”, “economic effects of innovational activities”, “financial and innovative strategy”, and “innovation risk”; (2) identify links between innovative and strategic bank management, since bank innovations are carried out in conjunction with strategies and imply positive strategic economic effects, making the assessment of potential innovation risk necessary for the current moment and the future; (3) note that the launching and use of new technologies on economic cycles and phases involving a necessary correlation between innovative profit and these phases; (4) provide preferable measurements of banks’ innovative activity and financial performance against commission income; (5) assess the potential financial performance of banks’ financial and innovative strategies within economic cycles and phases and in accordance with the nature of income; (6) present general areas for the practical application of an adapted data mining–Monte Carlo method, based on a proprietary software product. The model’s application in the “open innovation” system exhibits its multipurpose nature and allows for the selection of alternative strategic innovative solutions within economic cycle phases. It also serves in the promotion of Big Data technology in relation to finance and innovation, which is a promising area, and determines the values of the desired indicators for the “bank of the future” concept.

The study substantiates the need to develop the authors' model for strategic evaluation of financial potential in corporations based on stochastic simulation, which provides for determination of an absolute indicator for sustainability of financial potential resources (i.e. strategic permanent resources for financial potential and relative strategic ratio), as well as actual and strategic indicators values deviations, the study also provides prerequisites for relevant expert conclusions. Such model implies influence of emergent (macro-, meso-) environment on financial potential of corporations. Its application is of a universal character, it contains integrated interests of different stakeholder groups (owners, financial managers, lenders, potential owners, creditors, investors, suppliers, auditors, lawyers, associations, trade unions) allowing in a short period identify internal actual and potential financial opportunities, risks and hidden potentials, takes into account emergent environment influence on financial potential condition in corporations, thus contributing to development of strategic policies for its generation.