№ 5/2017

Fìnansi Ukr. 2017 (5): 76–94

MONETARY POLICY

KOVALENKO Viktoriia ¹

¹Odesa National Economic University
OrcID ID : https://orcid.org/0000-0003-2783-186X

The role of countercyclical regulation in promoting sustainable development of the financial market of Ukraine

The article is devoted to the development of scientific and methodological approaches and practical recommendations for the implementation of countercyclical regulation concept in order to prevent the occurrence of systemic risk in the financial sector of Ukraine's economy. Based upon the results of scientific research on the essence of the concept of “countercyclical regulation”, the author suggests the conceptual foundations of such regulation: goals, tasks, functions, subjects and objects. Countercyclical regulation is defined as a system of methods and tools for smoothing cyclical fluctuations of the banking system and individual banks during a crisis and preventive measures to neutralize potential risks in banking activities due to increased demand for interest-bearing banking services. The author analyzes the key indicators by which the preconditions for introduction of countercyclical regulation in Ukraine are disclosed. The system stability of the Ukrainian banking sector and the impact of the introduction of the Basel III macro-prudential tools are assessed. The paper highlights the possibility of using a countercyclical capital buffer calculated on the basis of the share of foreign loans to GDP. In order to introduce countercyclical regulation in Ukraine, the author outlines key directions of its implementation: transition to dynamic provisioning; restrictions on swelling bank balance sheets; the extension of the list of factors affecting capital adequacy; the regulation of backbone banks and bank capital insurance. The article substantiates the efficiency of the countercyclical regulation system, which is determined primarily by the approaches used to estimate the debt-to-GDP ratio and migration of foreign capital.

Keywords:macroprudential policy, countercyclical regulation, capital, liquidity, systemic risk.

JEL: E32, F32, F41, O11.

KOVALENKO V. . The role of countercyclical regulation in promoting sustainable development of the financial market of Ukraine / V. . KOVALENKO // Фінанси України. - 2017. - № 5. - C. 76-94.

Article original in Ukrainian (pp. 76 - 94)

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