A model for analyzing the financial stability of banks in the VUCA-world conditions

Abstract

VUСA is a chaotic and rapidly changing business environment that, based on the variability, uncertainty, complexity and ambiguity of the modern world, transforms the approach of banks to the analysis of financial stability. The aim of the paper is to improve tools for monitoring the impact of VUCA-world conditions on the financial stability of banks, namely a model for studying and analyzing the impact of the modern business space “VUCA” on the financial stability of the country's banks. To test the model, the method of constructing regression equations in multifactor regression analysis is used. For this study, data from some Eastern European countries (Ukraine, Belarus, Latvia, Lithuania, Moldova) were used, and time series data were used for 10 years from 2010 to 2019.Having considered the definition of “VUCA-world conditions”, the model of modern business space “VUCA” was developed when analyzing the activity of banks in the studied countries. Drivers, consequences, requirements and macroeconomic indicators of the countries’ activities in the VUСA-world conditions are determined. The VUCA-world conditions also consider the study of key macroeconomic indicators that allow building long-term relationships throughout the value chain. The analysis of the studied Eastern European countries showed that with the increase of factors of GDP growth, GNI per capita growth, research and development costs, foreign direct investment, and net inflow of 1%, the effective ratio of bank capital and assets also increases. The assessment, in contrast to the existing ones, makes it possible to consider the impact of the macroeconomic environment of banks on their financial stability.

Забезпечення Ефективності Функціонування Механізму Активних Банківських Операцій В Умовах Війни

“…Сучасний стан економіки України та стан фінансо во кредитних відносин визначив те, що ситуація змінюється настільки швидко і непередбачувано, що неможливо планувати подальші дії і намагатися перед бачити майбутню ситуацію на основі існуючих історич них даних. Причому наростання волатильності у банківській прибутковості було зафіксовано ще у 2020 році [10], коли ризики економічного середовища не на були сучасного загрозливого характеру.…”

Vuca Era: The Role of Business And Knowledge Management System To Build Coastal Community Economic Resilience

“…These uncertain emotional conditions require business people to be able to adjust or adapt to existing needs immediately. Therefore, to deal with this VUCA, business people must be open-minded, broad, and not static to adjust to the current uncertainties (Saksa, 2021;Khalatur et al, 2021).…”

Sustainability of the regional financial system: a case study of the Northwestern Federal District

“…The issues of assessing financial stability and vulnerability of financial systems are widely discussed in the scientific literature. For example, in Khalatur et al ’s study (2021) , the method of deriving regression equations in multivariate regression analysis is used to test the model for assessing the financial system's sustainability. Based on the data from several Eastern European countries from 2010 to 2019, a model of the modern business space ‘Volatility, uncertainty, complexity and ambiguity’ (VUCA) was developed on the example of the banking sector.…”