FINANCIAL AND ECONOMIC REGULATION

LYUBICH Oleksandr ¹, VOLOSHYN I. V.

¹SESE “The Academy of Financial Management”
OrcID ID : https://orcid.org/0000-0002-9339-4242

Methodological problems of financial management in Ukraine’s banking sector: lessons of the crisis

The article demonstrates that the 2008-2009th financial crisis in Ukraine has had a significant and complex impact on its budget. It is shown that the banking crisis has led to a reduction in taxes revenue in the budget, diversion of public funds for the capitalization of state banks and the nationalization of systemic private banks. The main reasons for the negative impact were poor level of risk management and inefficient level of its implementation in the overall system of financial management. As a result, the risks of the banking system of Ukraine were significantly underestimated. To safeguard the state budget from unexpected increasing the expenses on the capitalization of state banks and the nationalization of private ones from reducing the taxes revenue were proposed to develop strategies of improving controllability of banks, to conduct simulation of the banking system of Ukraine on system-dynamic model base and to strengthen supervision of banks by introducing reporting about projected cash flows and cash flows at risk, to develop a corresponding methodology for assessing the risk of net cash bank loss before changes in operating assets and liabilities and for stress-testing of net cash profit and loss of the bank.

Keywords: crisis, risk management, banking system, financial management, management reporting, controllability, observability, banking supervision, budget.

JEL: G20, G21, G28

Lyubich O. . Methodological problems of financial management in Ukraine’s banking sector: lessons of the crisis / O. . Lyubich, I. V. VOLOSHYN // Фінанси України. - 2014. - № 2. - C. 94-114.