Assessing the Interbank Loans Market of the Systemically Important Banks in Ukraine

Abstract

The aim of the study is to assess the state of interbank lending to the systemically important banks in Ukraine, taking into account the current conditions of functioning of the economy. The article analyzes the dynamics of the number of banking institutions for 2008–2023, identifies the causes and consequences of their significant reduction. The essence and significance of systemically important banks are determined; approaches and principles of granting banking institutions the status of systemically important (SIB) are described; special conditions for withdrawal of SIB from the market under martial law have been allocated. A comprehensive analysis of the state of interbank lending to systemically important banks in Ukraine during 2019–2022 was carried out, in particular, the total amount of interbank loans received, the activity of the SIBs to attract interbank loans (IBCs) by their share in the total amount of liabilities, by the share of IBC in the balance sheet currency and the ratio of IBC to equity during the analyzed period were examined. The results of the carried out study indicate that it is interbank loans that are characterized by a quick reaction to changes in financial market conditions. It has been determined that systemically important banks of Ukraine reduce their dependence on interbank financing, which in practice means their financial stability and strength. It is proved that the studied banks, when forming the resource base, try to avoid a high share of interbank loans both in the total amount of mobilized funds and in comparison with equity, since IBCs are the most expensive instruments for replenishing the resource base of commercial banks. Emphasis is placed on important achievements of the systemic reform of the banking sector, which led to the cleansing of the domestic market from weak and unreliable banks and the construction of a Western-style banking system in Ukraine in compliance with world standards of banking business. Thanks to proper regulation and control on the part of the NBU over the observance by commercial banks of the established norms and rules of conducting banking business, the domestic banking system steadfastly endures all modern challenges and even in conditions of a full-scale war proves its financial stability and reliability, maintaining customer trust and recognition of international partners.

Keywords

• interbank loans
• systemically important banks
• liabilities
• equity.