Page 115 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE

In fact, society delegates to the banking system right to act as an agent

not only in providing efficient financial intermediation, but also in financial
security issues settlement.

Solution for reconciliation of commercial interests of banks with

social and economic interests in the context of financial stability providing is
offered in two levels: development of necessary regulatory policy and

incentives for banks to make them influence the threat in the financial
system, and the formation of the special features of the banking system that

will help to protect the financial system from threats and to increase the
influence of banks on the financial stability.

Conclusion
Based to the analysis of the availability and quality of incentives at

the level of the general and the banking legislation of Ukraine, which could

help to harmonize the interests of principal and agent in the field of financial
stability, it follows that:

- Ukrainian law has no systematic approach for understanding of
financial stability and the legal basis for the organization of the financial

safety net, coordination of actions of regulators and macro prudential
regulation;

- measures to ensure financial stability are mainly situational and are

focused on addressing the current imbalances;
- state regulation is not transparent for the public and unpredictable, which

negatively affects the level of confidence in the regulatory policy of in the financial
sector.

In the context of the second direction of solving the "agency
dilemma," according to the analysis of quantitative and qualitative

parameters of banking activities, the presence of imbalances in the banking

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