FINANCIAL STABILITY OF THE BANKING SYSTEM OF UKRAINE UNDER MARTIAL LAW: CHALLENGES AND WAYS TO STRENGTHEN

Abstract

The article explores the issue of maintaining financial stability in Ukraine’s banking system under the extraordinary conditions of martial law. The urgency of the research is driven by the full-scale invasion of Ukraine by the Russian Federation, which created an unprecedented level of macroeconomic, operational, and institutional stress for the financial sector. The aim of the paper is to systematize the main threats to banking stability during the war and to formulate a set of adaptive responses by the regulator and banking institutions. The research methodology is based on structural and comparative analysis of official statistics, expert reports, and regulatory measures implemented by the National Bank of Ukraine. The article identifies and groups the key internal and external risks affecting financial resilience: liquidity constraints, volatility in income dynamics, growth of non-performing loans, and reduced operational accessibility in certain regions. A separate emphasis is placed on the role of the National Bank of Ukraine, whose strategic interventions in monetary policy, refinancing mechanisms, and foreign exchange regulation have been critical for maintaining stability. The results of the study confirm the effectiveness of timely macroprudential actions taken by the central bank and demonstrate the relative resilience of Ukraine’s banking sector. At the same time, gaps remain in terms of digital infrastructure integration, crisis response scenarios, and long-term trust restoration tools. The paper presents a structured assessment of financial stability indicators over 2021–2024 and outlines positive post-crisis adaptation trends among banks. The practical value of the article lies in the proposed set of recommendations aimed at improving the stability of the banking sector under systemic risks. These include: flexible regulatory standards, strategic development of digital channels, enhanced communication policy with depositors, and harmonization of national regulation with EU standards. The research contributes to the theoretical understanding of banking resilience in war conditions and provides applicable tools for strengthening it.