Strategic Development of State Institutions in the Regulation of Banking Activity: Corporate Sector of the Economy (Економіка та суспільство)

Summary

• The article examines the strategic development of state institutions in banking regulation and their role in stable functioning of the corporate sector.p.1
• The National Bank of Ukraine implements monetary policy, conducts banking supervision and coordinates financial sector stabilisation.p.3
• State institutions must monitor bank liquidity, capital adequacy, loan portfolio quality and problem debt.p.3
• The financial sector strategy envisages gradually reducing the non-performing loan (NPL) ratio to no more than 10%.p.3
• Recent legislation provides for banks of financial inclusion with a limited banking licence to serve small and medium businesses in war-affected regions.p.4
• State banks should act as a temporary stabilisation mechanism rather than a permanently dominant one.p.4

Key insights

1. A high share of non-performing loans has long reduced the effectiveness of Ukraine's banking system.p.3
2. Priorities for NPL reduction include developing a secondary market for problem assets and improving restructuring procedures.p.3
3. Digital financial development must be accompanied by financial inclusion.p.4
4. A limited banking licence model is meant to widen access to financial services for small and medium businesses.p.4
5. Strategic benchmarks include reducing the shadow economy, gradual liberalisation of currency regulation and more efficient corporate lending.p.5
6. Future research should develop quantitative indicators for assessing the effectiveness of state banking regulation policy.p.5