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Improving the System of Risk Management in Ukrainian Banks

Author

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  • Skasko Oleh I.

    () (Lviv Institute of Banking of University of Banking of the National Bank of Ukraine)

Abstract

The goal of the article lies in the study of evolution of formation of the risk management system in Ukrainian banks, main instruments, methods of risk management and organisational approaches to formation of subdivisions of risk management and corporate management in banks. Analysing recommendations of the Basel Committee on Banking Supervision, legislative and regulatory acts, which form organisational and methodological requirements by risk management in banks, the article reveals shortcomings of its functioning. The article gives proposals on improvement of riskology in Ukrainian banks, namely: introduction of the requirement for risk assessment and stress testing by banks in the medium-term prospective (up to 3 years), which would reveal risks of realisation of long-term bank programmes, potential losses of receipts and capital due to existing gaps between the terms of performance of obligations by assets and liabilities, etc. In the result of the study the article establishes that in order to realise requirements of the Basel Committee on Banking Supervision on organisation of subdivisions of risk management in banks, it is necessary to introduce qualification requirements to managers of these services and procedures of their assignment/retirement in co-ordination with the banking supervision service, the status of which in the bank is not lower than managers of the internal audit and financial monitoring services, assignment of whom should be mandatory co-ordinated with NBU.

Suggested Citation

  • Skasko Oleh I., 2014. "Improving the System of Risk Management in Ukrainian Banks," Business Inform, RESEARCH CENTRE FOR INDUSTRIAL DEVELOPMENT PROBLEMS of NAS (KHARKIV, UKRAINE), Kharkiv National University of Economics, issue 1, pages 274-279.
  • Handle: RePEc:idp:bizinf:y:2014:i:1:p:274_279
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    References listed on IDEAS

    as
    1. David M Dror & John Armstrong, 2006. "Do Micro Health Insurance Units Need Capital or Reinsurance? A Simulated Exercise to Examine Different Alternatives*," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 31(4), pages 739-761, October.
    2. Christian Biener & Martin Eling, 2012. "Insurability in Microinsurance Markets: An Analysis of Problems and Potential Solutions," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 37(1), pages 77-107, January.
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