FINANCIAL MECHANISMS FOR ENSURING THE STABILITY OF BANKING INSTITUTIONS IN THE SYSTEM OF MODERN MANAGEMENT

Abstract

The article examines the theoretical foundations and practical aspects of ensuring the financial stability of the banking system of Ukraine under conditions of economic transformation and increasing systemic risks. The essence of financial stability is substantiated as the ability of the banking system to effectively perform the functions of financial intermediation, ensure the continuity of monetary circulation, and provide a rational allocation of financial resources. It is established that the formation of stability is significantly influenced by macroeconomic fluctuations, the consequences of martial law, changes in the regulatory environment, and global financial trends. Based on the analysis of key performance indicators of Ukrainian banks for 2020-2026, contradictory trends in the development of the banking sector have been identified. In particular, a reduction in the number of banking institutions has been recorded alongside simultaneous growth in assets, capital, and the resource base, which indicates a structural transformation of the system. It has been proven that lending activity is characterized by instability, while the growth of household deposits reflects an increase in public trust in banks. At the same time, profitability indicators demonstrate significant variability, confirming the sensitivity of the banking system to crisis impacts. It is substantiated that ensuring financial stability requires the comprehensive application of financial mechanisms, among which key roles are played by capital and liquidity management, compliance with prudential standards, an effective risk management system, and the implementation of stress testing. It is determined that the integration of macro- and microprudential regulation with internal banking management processes contributes to increasing banks’ adaptability to external shocks. The importance of the digitalization of the banking sector as a factor in improving the quality of information support and the effectiveness of managerial decision-making is proven. It is concluded that the further development of financial stability mechanisms should be based on the combination of regulatory instruments and modern technological solutions, which will ensure the long-term resilience of the banking system of Ukraine under conditions of uncertainty. The prospects for further research lie in an in-depth analysis of the impact of digitalization in the banking sector and the development of financial technologies on the effectiveness of mechanisms ensuring the financial stability of the banking system under conditions of increasing uncertainty.