Page 114 - Azerbaijan State University of Economics

CONTRIBUTION OF BANKING SYSTEM INTO FINANCIAL STABILITY OF UKRAINE

- the protection of interests of the investors and consumers of

financial services is enforced;
- the consolidated supervision over financial institutions and macro-

prudential supervision are introduced;

- a single database of financial institutions is used, reporting is
simplified and unified;

- approaches to the regulation and supervision of financial institutions
are standardized;

- the opportunities for the professional development of the employees
of regulators and financial institutions are expanded.

At the same time, the implementation of the Western experience to ensure

the financial stability should be balanced – one should understand how objectively
possible to introduce certain measures, how effective are certain instruments, given

the existing relationship between economic entities, development of markets

infrastructure and so long. Thus, the results of research on the ways banking
institutions fulfill their basic functions in the economy gives grounds to consider the

relationships between the banking system and the society are essentially agency
relations, because of:

i) while fulfilling immanent functions, banks affect the key qualities of the
financial system, which determine its stability. This enables to define banking

institutions as systemically important institutions whose activities affect the stability of

the financial system;
ii) realization by the banking system of its functions requires an

appropriate legal mechanism (legal framework for banking activities, control
and supervision systems, compliance with regulatory requirements, etc.). In

this case the functions are "delegated" by society to the banking system.

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