Lasukova Anna, PhD (Economics), Senior Lecturer, Department of Finance, Banking and Insurance, Sumy State University, Sumy, Ukraine

ORCID ID: 0000-0002-1929-4729
e-mail: a.lasukova@uabs.sumdu.edu.ua

Temchenko Alexandr, student, Banking and Insurance, Sumy State University, Sumy, Ukraine

ORCID ID: 0000-0002-9539-6751
e-mail: sashatemchenko13@gmail.com

Domestic Experience in Restoring Confidence in the Country’s Financial Sector: an Overview of Key Tools

Abstract. Introduction. The level of confidence of the population is an important factor in the functioning of the country’s financial sector. The crisis phenomena occurred in 2008-2009 and 2014 has caused disruption not only of economic development, but also of financial stability and welfare of the population. This has led to a significant decline in consumer confidence in the banking sector and imbalances in the financial market. The article addresses the urgent problem of restoring public confidence in financial institutions after financial crises that have had a negative impact on financial markets.

Purpose. The purpose of the article is to analyze the state crisis management of the banking sector of Ukraine and to systematize the instruments used by the state authorities and financial institutions after the financial crises of 2008-2009, 2014 in order to increase the level of public confidence in the financial markets.

Results. The article summarizes the measures used by the National Bank of Ukraine and other public authorities, as well as the financial institutions themselves, in order to stabilize the processes that took place in the financial sector of the country under the crisis. The main ways of restoring public confidence in the financial market of the state and ensuring the stability of the banking sector of Ukraine are analyzed. The role of various state authorities in ensuring the stability of the banking system and restoring the confidence of citizens has been identified. Emphasis is placed on the impact of the tools under study on the level of public confidence in financial institutions. The necessity of introducing measures such as macro prudential policy to prevent and avoid the negative effects of crisis phenomena has been proved.

Conclusions. The study found that the tools used to restore public confidence in the financial sector of the state had a generally positive impact on the confidence of consumers of financial services. Among them, the most effective were the support for banks’ liquidity, the nationalization of troubled banks, and the elimination of insolvent banks. Although the instruments studied were positive, they were not as effective. All this necessitates the development of an effective crisis management policy for financial institutions to minimize the financial crises negative effects.

Keywords: crisis management; restoration of public confidence; state instruments of regulation; banking system; National Bank of Ukraine.

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