CAPITAL ADEQUACY IN ENSURING SUSTAINABLE DEVELOPMENT OF THE BANK UKRAINE

  • Kovalenko Victoria
Keywords: capital adequacy, banks, liquidity, Basel principles countercyclical buffer capital, mergers and acquisitions.

Abstract

The article is dedicated to the basic provisions of the evaluation and the role of capital adequacy of banks in ensuring sustainable development banks Ukraine. The purpose of the paper is to development of existing and development of new scientific and methodological approaches to defining sufficient capital for banks considering the cyclical financial and economic relations.

Having generalized scientific results, the author determines that the main element of sustainable development banks favor the formation of sufficient capital to provide cover risks in banks and perform their basic functions – transformation, emission. Transformational function is the basis for the formation of a sufficient level of bank capital.

The article analyzes the main features that should carry the capital of banks, providing its adequacy, namely: protective, operational and regulatory. The author has concluded the analysis of the evolution of approaches to assessing the capital adequacy of the bank. The author had concluded that they are close to international standards. The article analyzes current trends ensure capital adequacy of Ukrainian banks. It is concluded that the capital adequacy of banks although it is within the standard value, but tends to decrease. This is due to high losses to banks and growth of outstanding credit debt, which leads to the increase in reserves to cover credit risk. The author has substantiated that modern conditions of banking requires the use of market mechanisms that allow their own efforts to increase banks’ capital.

The author has formed the main directions of ensuring sufficient capital for banks. They charged: the further transformation of the Basel III standards that enhance the quality requirements for filling the bank capital due to real assets; creation of a countercyclical capital buffers designed to cover losses arising in periods of financial and economic turmoil; establish market rules and regulations mergers and acquisitions of banks.

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Published
2018-08-06
How to Cite
Victoria, K. (2018). CAPITAL ADEQUACY IN ENSURING SUSTAINABLE DEVELOPMENT OF THE BANK UKRAINE. Strategic Priorities, 43(2), 73-80. Retrieved from https://niss-priority.com/index.php/journal/article/view/102