Assessment of Financial Stability as a Component of the Banking System Anti-Crisis Regulation Mechanism

Abstract

The banking system plays a key role in the formation and development of country's economy, and its condition directly affects the effectiveness of financial interaction between various economic entities. This is due to its functional purpose in the system of economic relations and, first of all, the ability to redistribute free financial resources and generate additional funds for the needs of all participants in these relations - the state, economic entities, households. During the time of independence, the banking system of Ukraine went through a difficult times of formation and development, the last period of which was characterized by its radical restructuring and renovation. The purpose of this transformation was to ensure the reliability of the functioning of the banking system, the ability to resist various threats, the minimization of its activity risks for the undisputed fulfillment of obligations to bank clients and continuously providing financial services. It is quite obvious that the fulfillment of those goals is impossible without ensuring the financial stability of the banking system, which is understood as the ability to ensure equilibrium in the long run by counteracting/adapting/absorbing internal and external shocks based on the use of a proactive approach to identifying and managing threats to the functioning of the bank over time; maintain the continuity, efficiency and financial effectiveness of operation; ensure sustainable targeted financial development through early adaptation to the objective transformations of the economic environment by comprehensive integration of risk-oriented approach and the use of the newest methods to manage the bank in terms of all its business processes [1, p.70].