JEL Classification: G23.
Cherkashyna Ekateryna, PhD (Economics), Associate Professor of the Department of Banking and Finance Monitoring, University of the State Fiscal Service of Ukraine, Irpin, Ukraine
ORCID ID: 0000-0001-8651-3883
e-mail: portosik29@gmail.com
The effectiveness of state regulation and supervision of non-banking financial and credit institutions
Abstract. Introduction. Ukraine has a typical bank-centered model of the financial market. The banks are predominance among all financial intermediaries in this model. That is why the supervision and regulation are primarily considered banking. It should be noted that the requirements for banking institutions are constantly rising both in relation to the size of capital and the standards of liquidity, profitability and other. At the same time, the requirements for the activities of non-bank financial and credit institutions are much milder than for banks both in the area of capital and in relation to the standards of activity. Last years almost half of the banks have disappeared from the financial sector, and no new ones have emerged. At the same time, the number of non-bank financial institutions, such as financial companies, has grown rapidly. Financial companies primarily carry out one of the banking functions, namely lending and currency exchange transactions.
Purpose. The purpose of the article is to analyze the effectiveness of state regulation in Ukraine with the further development of directions for its improvement.
Results. The regulation is a mechanism to ensure that financial institutions enforce current legislation. Supervision is a monitoring of the activities of a non-bank financial and credit institution. Among the priority areas of prudential supervision activities of non-bank financial and credit institutions are the control over compliance with the requirements for disclosure of information, risk management, redundancy and increasing liability of financial institutions for violation. According to the results of the prudential supervision in 2017, 1,177 measures of influence were applied (39.2% less than in the previous year). To financial companies – 373; to credit unions – 278, to insurance companies – 236, to pawnshops – 134, to lessors – 125, to subjects of non-state pension provision – 23, to governors of the Federal Reserve and FON – 8.
Conclusions. Non-compliance by financial institutions with regulatory requirements is a direct threat to the violation of the rights of consumers of financial services. Indicators of the effectiveness of state regulation and supervision are low volatility of non-bank financial institutions, as well as improvement of their qualitative indicators.
Key words: regulation; supervision; legislation; non-bank financial and credit institutions; financial companies.
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Received: 02 September 2018
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How to quote this article? |
| Cherkashyna, E. F. (2018). “The effectiveness of state regulation and supervision of non-banking financial and credit institutions”, Modern Economics, vol. 11(2018), pp. 154-159. DOI: https://doi.org/10.31521/modecon.V11(2018)-25. |
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