Banking system of Ukraine in war

Abstract

Introduction. With the beginning of hos­tilities on the territory of Ukraine on February 2022, the domestic banking system has under­gone considerable turmoil and it functions in a stress mode and uncertainty. At the same time, banks continue their activities, try to fulfill all their obligations and adhere to regulations. However, certain transformations take place in the banking sector. The banking system quickly adjusts to functioning under martial law. Problem. The specified circumstances led to changes in the banking infrastructure, influen­ced the current trends of the banking market and accelerated the pace of digitization of banking processes. The aim of the article is to study the func­tioning of the domestic banking system under martial law. Methods. Methods of theoretical generali­zation, analysis and synthesis, grouping, and system approach were used in the paper. Results. The features of the domestic banking system and the functioning of banks under martial law were considered. The changes that took place in the structure of the banking sector and banking infrastructure under martial law were determined. The key trends of the banking market during the period of martial law were studied. The authors identified digitization features of the banks under current conditions and defined the key principles and instruments of financial support of the banks by the regulator. Conclusions. The country’s banking system operates stable and ensures continuous work of financial institutions through the coordinated actions of the regulator and the banks under martial law. There are no significant changes in the structure of the banking market, but the infrastructure of banks has been transformed under martial law. In addition, the current trends of the banking market demonstrate the presence of obvious difficulties in the work of banks due to the influence of martial law. Despite the war risks, the banks have a sufficiently high level of liquidity, which allows ensuring the further continuous implementation of non-cash payments and other obligations.

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