Assessment of Leading Indicators of State Regulatory Policy in the Banking Sector

Abstract

The article, based on the generalization of domestic and international experience in assessing the leading indicators of regulatory policy in the banking sector, formed proposals to determine the financial condition and risk of bankruptcy of the bank. It is proposed to supplement prudential banking supervision, based on tracking the economic standards of individual banks, with models of discriminant analysis for a comprehensive determination of the financial condition and risk of bankruptcy of banks. The built-in reference matrix of discriminant analysis of the level of financial condition and the degree of risk of bankruptcy of the bank helps to improve the quality of financial determination of its market value, which is a reliable indicator for informed decisions by owners, managers and customers to maintain its effective functioning and further stable development. The use of a range of values of the level of probability of bankruptcy, which is the inverse of the integral indicator of the financial condition of the bank, allows more differentiated determination of classes of banks by level of financial condition and group of banks by bankruptcy risk. The developed reference matrix as a starting point of methodological support of comprehensive financial assessment of market value of banks avoids mistakes in choosing the methodological approach and methods of calculating the market value of a particular bank and identify potential bankrupt banks for detailed revaluation of their loan portfolios and securities portfolios.