CAPITAL ADEQUACY IN ENSURING SUSTAINABLE DEVELOPMENT OF THE BANK UKRAINE
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.
2. Dulska, V.I. (2016). Vlasnyi bankivskyi kapital, joho funktsii ta skladovi [Bank’s own capital, its functions and components]. Visnyk Zhytomyrskoho derzhavnoho tekhnolohichnoho universytetu. Seriia : Ekonomichni nauky – Bulletin Zhytomyr State Technological University. Series : Economics, 3 (53), Part 3, 127–130 [in Ukrainian].
3. Kovalenko, V.V., & Cherkashyna, K.F. (2010). Metodychni pidkhody do vyznachennia rivnia kapitalizatsii bankivskoi systemy [Methodological approaches to determining the level of capitalization of the banking system]. Finansy Ukrainy – Finance of Ukraine, 8, 73–86 [in Ukrainian].
4. Torianyk, Zh.I. (2010). Otsinka rivnia dostatnosti resursnoho potentsialu bankivskykh ustanov na osnovi rozrakhunku intehralnoho pokaznyka [Evaluation of the adequacy of the resource potential of banks by calculating the integral index]. Visnyk Universytetu bankivskoi spravy Natsionalnoho banku Ukrainy – Bulletin of the University of Banking of National Bank of Ukraine, 1, 141–144 [in Ukrainian].
5. Adler, G., Pedro, C., & Tovar E., Camilo (2012, December). Does Central Bank Capital Matter for Monetary Policy? IMF Working Paper (Washington: International Monetary Fund) [in English].
6. Demirguc-Kunt, A., Detragiache, E. & Merrouche, O. (2010, October). Bank Capital : Lessons from the Financial Crisis. IMF Working Paper (Washington: International Monetary Fund) [in English].
7. Frank, N. & Hesse, H. (2009, September). The Effectiveness of Central Bank Interventions During the First Phase of the Subprime Crisis. IMF Working Paper. (Washington: International Monetary Fund) [in English].
8. Mitroff, I.I. (1994). Crisis management and environmentalism: A natural fit. California Management Review, 36/2, 101–113 [in English].
9. Kovzanadze, I.K. (2013). Postkrizisnoe razvitie mirovogo bankovskogo sektora: tendencii i perspektivy [Peace development banking sector after the crisis: trends and prospects]. Denhy i kredyt – Money and credit, 3, 60–63 [in Russian].
10. Latter, T. (1997, December). Causes and Management of Banking Crises. Centre for Central Banking Studies. London: Bank of England [in English].
11. Benes, J. & Kumhof, M. (2011, November). Risky Bank Lending and Optimal Capital Adequacy Regulation. IMF Working Paper. (Washington: International Monetary Fund) [in English].
12. Jang, B. & Sheridan, N. (2011, December). Bank Capital Adequacy in Australia. IMF Working Paper. (Washington: International Monetary Fund) [in English].
13. Marianne, O. (2015). Implementing Basel III through the Capital Requirements Directive (CRD) IV: Leverage Ratios and Capital Adequacy Requirements. Journal of Business Law and Ethics, Vol. 3, No. 1–2, 36–61 [in English].
14. Volovnyk, A.D., & Kybardyna, Yu.S. (2011). Bazel III: ispytanye nadezhnosti bankovskoj systemy Rossii v uslovijakh hlobalnoj konkurentsyi [Basel III: reliability test of Russia’s banking system in the face of global competition]. Ekonomyka megapolisov i regionov – Economics of mega-cities and regions, 3 (39), 40–49 [in Russian].
15. Malychina, S. (2011). Novye standarty Bazel ІІІ – perspektivy vnedrenija [The new standards of Basel III – the prospects for the introduction]. Bankovskij vestnik – Bank Bulletin, 9, 9–14 [in Russian].
16. Mіschenko, V. (2013). Kapitalizatsiia bankivskoi systemy Ukrainy : sohodennia ta perspektyvy [The capitalization of the banking system of Ukraine: present and prospects]. Visnyk Natsionalnoho banku Ukrainy – Bulletin of the National Bank of Ukraine), 7, 11–17 [in Ukrainian].
17. Zakon Ukrainy “Pro banky i bankivsku diialnist” : pryiniatyi 4 Hrud. 2000 roku № 2121-III [Law of Ukraine on banks and banking activity from 2000, December 4 № 2121-III]. (n.d.). search.ligazakon.ua. Retrieved from http:// search.ligazakon.ua/l_doc2.nsf/link1/T002121.html [in Ukrainian].
18. Instruktsiia Natsionalnoho banku Ukrainy Pro poriadok rehuliuvannia diialnosti bankiv v Ukraini: pryiniata 28 Serp. 2001 roku № 368 [Instructions National Bank of Ukraine on the order of regulation of banks in Ukraine from 2001, August 28 № 368]. (2001, August 28). zakon5.rada.gov.ua. Retrieved from http://zakon5.rada.gov.ua/laws/show/ z0841–01 [in Ukrainian].
19. Osnovni pokaznyky diialnosti bankiv Ukrainy [Main indicators of banks in Ukraine]. (n.d.). bank.gov.ua. Retrieved from http://www.bank.gov.ua [in Ukrainian].
20. Pokaznyky finansovoi zvitnosti bankiv Ukrainy [Indicators of financial statements of banks Ukraine]. (n.d.). bank. gov.ua. Retrieved from http://www.bank.gov.ua [in Ukrainian].