ASSESSMENT OF BANKING RISKS IN THE CONDITIONS OF WAR
Abstract
The article examines the main risks faced by banks, as well as their transformation in the conditions of military operations. War affects the banking sector, changing traditional risks and creating new challenges. The main purpose of the article is to identify these risks, understand how they change in war conditions, and identify opportunities for improving existing risk management systems in banks to ensure the stability of the financial sector. With the beginning of the full-scale war of the aggressor country, the main task of the regulator and banks of Ukraine became to preserve the trust of customers and ensure the stability of the banking sector. The current context of banks' activities and the high level of uncertainty of the future require effective management decisions both at the level of the National Bank of Ukraine and in each individual bank. Therefore, the issue of improving the risk management system in the conditions of martial law is extremely urgent, and its solution will ensure the stability of the banking sector, which is always a priority task for the economy of any country. The banking system of Ukraine has experienced numerous crises and challenges throughout its history, but the war that began in 2022 created unprecedented conditions that significantly affected its functioning. Military actions on the territory of Ukraine have led to a number of negative consequences for the banking sector, including increased risks, reduced public confidence, economic instability, and disruptions in the operational activities of banks. In 2023, the banking system of Ukraine witnessed a real sensation: record profitability despite the difficult conditions of wartime. During the period from January to December, Ukrainian banks earned UAH 86.5 billion in net profit, which is almost four times more than in 2022 and 12% more than in 2021, before the full-scale invasion. Thus, the banking sector is characterized by a significantly higher level of risk compared to other economic spheres. This is due to the specifics of the performed operations. thus, banking activities in the countries of the world are subject to strict regulation by the state and specialized supervisory bodies.
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