PROBLEMS AND PROSPECTS OF INVESTMENT ACTIVITY OF UKRAINIAN BANKS

Abstract

The investment activity of banks in Ukraine is a critical component of the country’s financial system, influencing economic growth and stability. This paper examines the current state, challenges, and future prospects of investment activities conducted by Ukrainian banks. The analysis reveals that despite the significant role of banks in mobilizing and allocating financial resources, several obstacles hinder their investment efficiency. Key issues include regulatory constraints, high levels of non-performing loans, and limited access to long-term funding. Additionally, the volatile economic environment and political instability further exacerbate these challenges. The study highlights the need for comprehensive reforms to enhance the investment climate. These reforms should focus on improving the regulatory framework, strengthening risk management practices, and fostering a more stable macroeconomic environment. Furthermore, the development of capital markets and the introduction of innovative financial instruments are essential to diversify funding sources and reduce dependency on traditional banking channels. Prospects for the future are cautiously optimistic, contingent upon the successful implementation of these reforms. The potential for growth in the banking sector’s investment activities is substantial, given Ukraine’s strategic location and the ongoing integration with European financial markets. By addressing the identified challenges and leveraging opportunities, Ukrainian banks can significantly contribute to the country’s economic development and integration into the global financial system. This paper provides a detailed analysis of the factors affecting the investment activities of Ukrainian banks and offers policy recommendations to enhance their effectiveness. The findings underscore the importance of a coordinated approach involving policymakers, financial institutions, and international partners to create a conducive environment for sustainable investment growth. Ultimately, the successful transformation of the investment landscape will depend on the collective efforts of all stakeholders involved.