Іnternational legal norms of bank capital: problems on implementation in Ukraine

Kosova, E. V. and Косова, Е. В. (2015) Іnternational legal norms of bank capital: problems on implementation in Ukraine. Вісник Донецького університету економіки і торгівлі імені Михайла Туган-Барановського (1(62)). pp. 120-129. ISSN 2079-4819

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Abstract

The generalization of international legal norms of bank capital, the capability of their implementation allow for institutional characteristics of the national banking sector and the development of appropriate measures and proposals to improve regulations of the national banking regulator. Methods. The study used the following methods: theoretical synthesis, comparative law, analysis and synthesis, classification, graphical visualization, mandatory economic standards. Results. The key law of international standard Basel III are systematized: increasing minimum requirements for common equity to Tier I capital and equity, the presence of a protective buffer conservation and counter-cyclical buffer, increased requirements for common equity components of the highest quality; the presence of a five-year transition period; reduce the cost of bank capital investments in subsidiaries and financial institutions, which reduces the risk of cross-ownership. The measures that will create conditions for the implementation of international legal standards on bank capital in domestic practice: reducing inefficient capital and increase liquidity; restructure balance sheets to improve the quality of capital, ensuring effective management of limited resources; adjusting business 4 models to create a flexible and efficient operational structures of capital, high liquidity and low-cost banking products. The recommendations for improving regulations of the national banking regulator are grounded. Scientific novelty. The basis of the implementation of international legal standards on bank capital entrusted consideration of differential differences in building banking systems of different countries requires the development of a set of measures aimed at the gradual implementation of Basel III, align the standards of Basel II and the transition from the tactical mechanisms to strategic management of banks capital taking into account the real possibilities of Ukrainian banks. Practical meaningfulness. The results of research will conductive to improve the banking sector's ability to amortize external and internal shocks of the financial and economic stress, and thus they can reduce the risks of secondary effects from the financial sector to the real economy. Practical value of results is to develop recommendations for a substantial revision of the banking strategy plans, including capital management strategy and to mitigate bank risks that contribute to sustainable development of the banking system of Ukraine.

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