Assessment of the Target Criterion and Leading Indicators of Regulatory Influence in the Banking Sector
Doctor of Economic Sciences
Institute of Industrial Economics of the NAS of Ukraine, Kyiv
LLC “Investment and Legal Group”, Kyiv
Osadcha N.V., Artemenko D.M. Assessment of the Target Criterion and Leading Indicators of Regulatory Influence in the Banking Sector. Management of Economy: Theory and Practice. Chumachenko’s Annals: collection of scientific papers / Institute of Industrial Economics of the NAS of Ukraine. Kyiv, 2020. P. 68-81. DOI: https://doi.org/10.37405/2221-1187.2020.68-81
The article defines the essence and methods of measuring the target criterion and leading indicators of regulatory influence in the banking sector. It is proposed to supplement prudential banking supervision, based on tracking the economic standards of individual banks, with models of discriminant analysis for a comprehensive assessment of the financial condition and risk of bankruptcy of banks.
The use of the built-in reference matrix of discriminant analysis of the level of financial condition and the degree of risk of bankruptcy of the bank, as leading indicators of regulatory impact, will improve the quality of financial determination of its market value as a target criterion of regulatory impact on banking.
The reference matrix serves as a reliable indicator for informed decisions by owners, managers, customers and national regulators to maintain its effective functioning and further stable development.
The use of a range of values of the level of probability of bankruptcy, which is the inverse of the integral indicator of the financial condition of the bank, allows more differentiated determination of classes of banks by level of financial condition and group of banks at risk of bankruptcy.
The developed reference matrix as a starting point of methodological support of comprehensive assessment of market value of banks avoids mistakes in choosing the methodological approach and methods of calculating the market value of a particular bank and identify potential bankrupt banks for detailed revaluation of their loan portfolios and securities portfolios.
evaluation, target criterion, measurement indicators, regulatory impact, financial condition, probability of bankruptcy, bank.
- Ohliad bankivskoho sektoru [Banking Sector Review]. (October, 2020). Retrieved from https://bank.gov.ua/ua/news/all/oglyad-bankivskogo-sektoru-zhovten-2020-roku [in Ukrainian].
- Pro zatverdzhennia Instruktsii pro poriadok rehuliuvannia diialnosti bankiv v Ukraini: Postanova NBU vid 28.08.2001 r. №368 [On approval of the Instruction on the procedure for regulating the activities of banks in Ukraine: Resolution of the NBU of August 28, 2001 №368]. Retrieved from https://zakon.rada.gov.ua/laws/show/z0841-01/page#Text [in Ukrainian].
- Artemenko, D. M. (2016). Metodychne zabezpechennia kompleksnoi otsinky vartosti banku v kryzovykh umovakh [Methodical maintenance of a complex estimation of cost of bank in crisis conditions]. Ekonomichnyi visnyk Donbasu – Economic Herald of the Donbas, 1(43), рр. 101–109 [in Ukrainian].
- Pro zatverdzhennia Polozhennia pro vyznachennia bankamy Ukrainy rozmiru kredytnoho ryzyku za aktyvnymy bankivskymy operatsiiamy: Postanova Natsionalnoho banku Ukrainy vid 30.06.2016 r. №351 [On approval of the Regulation on determining the amount of credit risk by banks of Ukraine for active banking operations: Resolution of the National Bank of Ukraine of June 30, 2016 №351]. Retrieved from http://zakon5.rada.gov.ua/laws/ show/v0351500-16 [in Ukrainian].
- Artemenko, D. M. (2016). Rozvytok modeli Bleka-Shoulza pry otsintsi rynkovoi vartosti banku u vitchyznianykh umovakh [Development of the Black-Scholes model in estimating the market value of the bank in domestic conditions]. Visnyk Berdianskoho universytetu menedzhmentu i biznesu – Bulletin of Berdyansk University of Management and Business, 2(34), рр. 83-90 [in Ukrainian].
- Stolyarov, V. F., Artemenko, D. M. (2015). Specifics of Determining the Market Assessment Rights Requirement for Obligations Arising from the Implementation of the Bank Credit Operations of Different Quality that are Secured and Unsecured Collaterally. Economic Herald of the Donbas, 4(42), рр. 105-110.
Full Text .pdf