Capital adequacy of banks: modern measurements and further research

Kovalenko Victoria
D. Sc. (Economics), Professor of Banking Department, Odessa National Economic University, Ukraine, e-mail: kovalenko-6868@ukr.net, ORCID ID: https://orcid.org/0000-0003-2783-186X

Cite this article:

Kovalenko, V. (2022). Capital adequacy of banks: modern measurements and further research [Dostatnist kapitalu bankiv: suchasni vymiry ta podalshi rozvidky], Socio-economic research bulletin, Vìsnik socìal’no-ekonomìčnih doslìdžen’ (ISSN 2313-4569), Odessa National Economic University, Odessa, No. 1-2 (80-81), pp. 77-94.

Abstract

The article determines that at the current stage of Ukrainian banks functioning, an important problem is an improvement of the mechanisms for ensuring the adequacy of their capital as a key factor in developing a strategy for financially sustainable development of the banking system of Ukraine. Crisis phenomena in recent decades have caused a resonance in the global and national financial markets for the introduction of effective instruments for regulating the capital adequacy of banks. This makes it necessary to find approaches to the formation of the capital base that are adequate to modern conditions, aimed at its sufficiency, adequacy and structure. The purpose of this work is a formation of analytical support for building a capitalization strategy of banks based on the determination of their capital stability in the financial market. The structural-logical scheme of the analysis of banks capital stability is implemented in the following stages: an evolutionary study of international and national standards regarding the regulation of sufficiency of bank capital; building a system of indicators that characterize the level of capital stability of banks; grouping of banks according to the level of their capital stability on the basis of clustering; qualitative characteristics of the formed groups; determination of strategic directions for further capitalization of banks. The proposed structural and logical scheme was tested on the example of existing banks of Ukraine as of October 1, 2021. Its use made it possible to determine promising directions for further research in the field of bank capitalization management, namely: the application of the NBU’s policy on the development and activity of banks, taking into account the regional features of economy and social sphere development; introduction of the recapitalization mechanism of the largest banks; stimulation by the state of creating conditions for the maximum promotion of banks capitalization at the regional level; strategy development for exiting from the market of insolvent and unsustainable banks through their reorganization or liquidation.

Keywords

bank; management; capital; capital adequacy of banks; economic standards; cluster analysis; coefficient method; strategy.

JEL classification:J210; DOI: https://doi.org/10.33987/vsed.1-2(80-81).2022.77-94

UD classification: 336.713

This work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

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