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In this paper, we attempt to study the effectiveness of various simple machine learning methods in the prediction of bank failures. From a raw dataset of 10,938 US banks during the period of 2000–2020, we find that machine learning approaches do not really outperform the benchmark of conventional statistical method, logistic regression. However, using PCA to retain relevant variance in variables significantly improve the performance of machine learning methods and raise the out-of-sample accuracy of those method to over 70% to over 80%. Of all the machine learning methods used in this paper, the simple KNN seems to be the best model in forecasting bank failure in the United States. [ABSTRACT FROM AUTHOR]

Banks play an important role in the development and prosperity of countries' economies. We cannot carry out daily transactions, whether individual or business, without their presence. The purpose of current study is to investigate whether a relationship exists between insolvency risk and Islamic banks’ profitability in the MENA region. Previous researchers covered this risk individually, however, in this study the risk is taken into consideration including the deposit ratio which are the control variables in this study. For this purpose, data were obtained from 12 MENA countries covering 20 Islamic banks as panel data over ten years period from 2011 till 2020. The fixed effect models were relied upon to analysis data. In the study, the results of two profitability measures (ROA and ROE) were discussed to explain how they are distinct from each other using insolvency risk as independent variable. The results show that insolvency risk has insignificant effect on the profitability of Islamic banks measured by ROA and ROE, regarding control variable, the outcome demonstrate that deposit ratio has insignificant effect on ROA and ROE. [ABSTRACT FROM AUTHOR]

New risks make bank marketing especially relevant in modern conditions, e.g., COVID-19 restrictions, political issues, economic sanctions, etc. These risks affect the activities of banks, which have to look for new ways to create and promote their services and products. Bank products are quite peculiar: on the one hand, they are difficult to perceive by potential customers; on the other hand, digital technologies provide banks with additional promotion andexpansion opportunities. Global trends in bank marketing include such new technologies as artificial intelligence and digital platforms, new mobile applications, new sales channels and competition with other banks in this sphere, cybersecurity, winning the trust of customers, etc. New risks force banks to fight for customers and expand their market share using bank marketing concepts and tools. Digital marketing includes not only new promotion channels but also such new approaches as brand performance. Banks strive to meet customers halfway and to conquer new age groups by using gamification and financial education. The authors used the 7P marketing model to analyze AO Bank.DOM.RF as an average Russian bank and to recommend new options of bank marketing in practice. The analysis included strengths, weaknesses, opportunities, and threats.

The purpose of this article was to investigate the relationship between the diversification of banking resources and expenses with systemic risk in the country's banking system. In this regard, the accepted banks in the Tehran Stock Exchange were evaluated. In order to estimate the systemic risk, the criterion of conditional value at risk was used. Also, in order to estimate the impact of diversification of banking resources and expenses on systemic risk, panel data and quantile regression were used for a selection of banks in the country in the period of 2010-2022. The results obtained from this study indicated that the diversification of banking resources and expenses, because it leads to more dependence between financial institutions, as well as a different combination of financial assets, leads to an increase in systemic risk and contagion. It goes to other financial institutions. In the estimated model, the coefficient of influence of bank diversification index on systemic risk in panel data regression model is equal to 1.45 and in quantile regression it is equal to 1.33. In addition, according to the results of the quantile regression, it can be stated that the effect of diversification index of sources and expenses in different banking groups has been different according to the level of systemic risk. The high level of systemic risk in Iran shows that despite the existence of supervision of some financial institutions, the systemic risk of financial activities is excessive, and this perhaps suggests the need for an effective supervisory authority.

The purpose of this paper is to identify the peculiarities of banks’ business models and assess their risks, which is especially relevant in the context of the war in Ukraine since 2014. The information base is the published statements for each month of 63 Ukrainian banks for the period from 1 January 2018 to 1 January 2024. The number of indicators is chosen in an empirical manner. Business models are investigated using the method of structural-functional groups of banks, which allows estimating large arrays of financial indicators, grouping banks with similar characteristics and drawing conclusions about the main risks. It is convenient to use neural networks, namely Kohonen’s self-organizing maps, to estimate large data sets. The largest group of banks places a significant part of assets in government securities and has an unstable resource base. The share of these banks in the system as of January 1, 2024 is 38% and total assets are 10%. The second group by number of banks is focused on corporate lending with a high share of current resources in liabilities, and includes 21% of banks, whose assets account for 31% of total assets. State-owned banks, PrivatBank and OschadBank, account for 35% of total assets. The business models of these banks are characterized by dependence on retail funds, a high share of investment operations, and high credit and currency risks. Ukraine’s banking system has significantly developed a risk-oriented approach to management, which allowed it to maintain stability in the face of a full-scale war.

This paper investigates the interaction between decentralized financial services and the traditional banking system by building VAR models, conducting Granger causality tests, building impulse response functions, and performing variance analysis. To implement the model, banking indicators of the USA, India, and Great Britain were selected: the volume of commercial and industrial loans, interest rate, consumer price index, total liabilities and capital of banks, aggregate deposits, federal funds rate (for the USA), and repo rate (for India). The study examined central bank data of the specified countries from July 2018 to January 2024 with the TVL indicator, which measures the sum of all assets locked in DeFi protocols. The results of the impulse response function (IRF) for countries demonstrate different interactions between TVL and bank indicators. The US response to TVL shocks demonstrates a stimulative monetary policy, with significant Fed rate reductions and increased commercial lending to boost economic activity. In contrast, India’s monetary stimulus, marked by declining repo rates and growth in banking sector liabilities and deposits, aims to enhance economic resilience. The UK, however, adopts a conservative monetary approach, with sharp bank rate increases and mixed lending and deposit responses, prioritizing financial stability. Analysis across these nations highlights different impacts of financial indicators on TVL. In the US, the evolving relationship between TVL and bank indicators reflects the financial system’s complexity. India’s sensitivity to monetary policy, credit conditions, and inflation significantly influences TVL. In the UK, central bank decisions, particularly the bank rate, play a crucial role in financial market dynamics. AcknowledgmentThe authors appreciate the assistance in the preparation of the article provided by the University of Debrecen Program for Scientific Publication and the János Bolyai Research Scholarship of the Hungarian Academy of Sciences.

After two decades of high economic growth and fast development progress, Ethiopia is facing significant macroeconomic challenges such as high inflation, foreign exchange shortage, and slowing growth. At the same time, it is imperative to bring the economy on a green and climate-resilient development path. In this context, the financial sector has an essential role to play. International financial institutions recommend reducing the fiscal deficit to dampen money growth and inflation and giving up exchange rate control. Based on an alternative analysis of inflation, this article argues that money supply restrictions and fiscal austerity may not only prove ineffective in addressing inflation while incurring high economic costs, but also impede a response that comes via productive and green investment to ease the economy’s supply-side constraints and to lower inflation. Rather than fixating on the quantity of money and market exchange rates, central banking should focus on the direction of financial flows to make sure they go into real green investment rather than speculative and inflation-driving investment. This policy blueprint will also reduce balance-of-payments problems and improve both internal and external monetary stability. [ABSTRACT FROM AUTHOR]

Macroprudential regulation of the banking system is a significant instrument for ensuring the financial stability of the state. Unsecured consumer lending is growing at a steadily high rate (in August-October 2022, the average monthly debt growth was 0.9%), and it remains a priority segment for banks because of its high margins. The share of unsecured consumer loans provided to borrowers with debt burden indicator (DBI) of more than 80% amounted to more than 32% in the third quarter of 2022 (28% in the second quarter of 2022). The share of consumer loans for a term of more than 5 years remains at a high level (15% in July-September 2022). The share of MFO loans issued to borrowers with a DBI of more than 80% was 41% in the second quarter of 2022 (38% in the first quarter of 2022). A further increase in the citizens' debt burden in the context of the economy restructuring may create additional macroeconomic risks. Problems of citizens with servicing loans and borrowings can lead to a reduction in demand in the economy, and losses of banks as a result of writing off "bad" loans can lead to a decrease in their ability to lend to the economy. To limit the risks associated with an increase in the citizens' debt burden, since the first quarter of 2023, the Bank of Russia has established direct quantitative restrictions on the issuance of certain types of credits (loans) and the application of increased buffers to risk coefficients if creditors exceed established limits. This article discusses the main approaches to implementation of the macroprudential policy of the Central Bank of the Russian Federation, its goals and instruments, and peculiarities of application in the current conditions. [ABSTRACT FROM AUTHOR]

The article establishes that the effective management of banking risks should be based on the relevant fundamental research on the formation of an effective mechanism for regulating financial relations in the banking sector. The purpose of the study was to substantiate the theoretical and methodological foundations of effective banking risk management and develop practical recommendations for improving its effectiveness in the context of digitalization. The study utilized various scientific methods, including financial stability indicator analysis, economic standards evaluation, financial condition coefficient calculation, and testing the CAMELS system within the digitalization context. Bank risk management is crucial for sustainable development. Studying risk management enhances the Russian banking sector's financial stability. However, risk management in stable conditions differs significantly from digitalization. In the digital era, objectives, resource availability, support, and decision-making time change. The goal becomes avoiding major performance deviations caused by risks in active and passive operations and bank activities. [ABSTRACT FROM AUTHOR]

The paper subscribes to the broad strand of literature that examines the interplay between banking activity and climate risk, by particularly focusing on identifying and classifying European Union countries into similar, homogenous groups based on their intrinsic pattern related to climate vulnerability and readiness to cope with the negative effects of natural disasters. By applying an unsupervised learning clustering algorithm on a novel input dataset comprising six proxy indicators for the physical risk associated with climate challenges, we reveal the climate profile of the EU countries. A direct implication of our findings consists of ascertaining which banking systems are more exposed to environmental risks arising from physical sources in the home country they headquarter or in the host countries envisaged for the conduct of transnational financial activity. Results indicate that the least vulnerable EU countries to physical risks, being at the same time best performers in the process of climate risk adaptation, prevention, and management are Denmark, Luxembourg, Germany, Sweden, and Finland. Hence, their banking systems are less exposed to the adverse consequences of the physical risks. In contrast, banks operating in Bulgaria, Croatia, Poland, and Romania are the most exposed to the ripple effects of these risks, due to countries' increased vulnerability to climate risk and to the low degree of performance in implementing climate policies. [ABSTRACT FROM AUTHOR]

Against the backdrop of global challenges and unprecedented events, intellectual capital is seen as the key to opening doors for banks to achieve competitiveness. Inspired by this issue, the paper explores the relationship between intellectual capital and one of the most important functions of banks, namely financial intermediation. The study uses the balanced panel data of 26 Vietnamese commercial banks collected directly from their audited financial statements between 2006 and 2020, and employs various regression analyses such as OLS, Fixed-effect, and the GMM method, in which the VAIC model is utilised as the measure of the intellectual capital of banks. The consistent evidence demonstrates that intellectual capital plays a key role in fostering this function of banks. Also, when dividing VAIC into three components, the empirical result indicates that capital employed efficiency is the most effective resource to enhance financial intermediation compared to human capital efficiency and structure capital efficiency. Furthermore, these findings seem to be clearer in small banks than in large ones, and remain unchanged during both crisis and non-crisis periods. Besides, in the crisis period, the evidence suggests that banks should strengthen their human capital efficiency, and structure capital efficiency should be taken into consideration. Therefore, this study provides a deep insight into the influences of intellectual capital on banking operations in emerging countries, where the development and sustainability of banks could ensure economic growth. [ABSTRACT FROM AUTHOR]

Financial technology (FinTech) plays a crucial role in banking by offering a range of banking and financial services. This study aims to show how FinTech promotes financial inclusion. The development of an emergency finance mechanism has just occurred. A combination of descriptive and analytical methods was used in this paper. To understand the challenges, opportunities, and ways of overcoming them, the Arab world's experiences have been shared. As stated by the researcher and supported by their suggestions, the goal of financial inclusion is to bring the financially excluded into the formal financial system. The survey found that the general population does not have a strong financial culture, which is one of the obstacles FinTech must overcome. The Arab world, however, saw substantial progress in FinTech; therefore, this was not a barrier. There are a lot of problems with the legality, regulations, and financing of FinTech in Arab nations. The use of the mobile subscriber's index by FinTech effectively contributes to the achievement of financial inclusion, as measured by FinTech and financial inclusion indicators. Most Arab countries still have low scores on the financial inclusion index since they aren't interested in developing FinTech, which slows down the index's progress. [ABSTRACT FROM AUTHOR]

This study investigates the influence of European bank board characteristics, in particular the presence of women, on value creation from a multi-stakeholder perspective. It covers 472 European banks from 2019 to 2022. Corporate governance characteristics identified as best practices in the literature were included in the set of explanatory variables. Our study provides new insights and knowledge on the importance of corporate governance characteristics for the creation of value for stakeholders, which goes beyond the creation of economic value for shareholders as measured by financial indicators. Our findings suggest that gender diversity on bank boards is associated with value creation from a multi-stakeholder perspective. Based on this study, academics, stakeholders, and regulators will better understand the important role of board characteristics, especially gender diversity, as determinants of shareholder and stakeholder value creation. [ABSTRACT FROM AUTHOR]

Objective: Monetary policies are very important in bank-oriented economies, and the government adjusts the policies of other areas based on the money market. The inadequacies that have directly or indirectly affected the performance of monetary policy makers in Iran over the past three decades have had destructive effects on the country's economy. Therefore, in the present study, a comprehensive policy model has been presented in order to reform the banking system of the Islamic Republic of Iran. Methods: This study was conducted with the aim of designing a model of organizational happiness among the employees of the Ministry of Energy. The current research is considered a mixed research method in terms of purpose, applied research type, method type, and data collection method. The statistical population in the qualitative part includes 20 experts and in the quantitative part it includes all the employees of the country's banking system, from which a sample of 384 people was selected. The main tool of data collection in the field section includes a semi-structured interview (in the qualitative section) and a researcher-made questionnaire. The validity of the questionnaire was confirmed using the content validity method. Cronbach's alpha coefficient was calculated to evaluate the reliability of the questionnaire. Cronbach's alpha coefficient was more than 0.7, which shows that the questionnaire has good reliability. Partial least squares technique and SmartPLS software were used to test the hypotheses. In the qualitative part, foundational data theory and MAXQDA software are used. Results: In the qualitative part, foundational data theory and Max Kyuda software are used. Based on the results of qualitative analysis, there are six categories of main factors including background factors (upstream documents), causal factors (organizational factors, human resource factors and management factors), central phenomenon (banking system reform), interventionist (politicization of the administrative system and resistance against change), strategies (policy reform) and outcomes (quality of working life, improvement of customer experience and improvement of financial and non-financial performance) were identified as the main components of the comprehensive policy model for reforming the banking system. The results of the hypothesis test in the quantitative part showed that the components of conditions, including organizational factors, human resources factors, and management factors, have an effect on the reform of the banking system; Resistance to change, politicization of the system, reform of the banking system and upstream documents have a significant impact on strategies (reform policy). It was also found that the reform policy has a positive and significant impact on all three consequences of the model, including the quality of work life (employees), improving the customer experience (customers), and the financial and non-financial performance of the bank (organization). Conclusions: The results obtained in this research, while strengthening the domestic literature about banking system policymaking, provide practical guidelines for reforming the banking system to senior managers of the country's banking system. [ABSTRACT FROM AUTHOR]

This article examines illegal orders and orders in the field of the banking system from the point of view of constitutional law. The study includes a review of constitutional norms and principles related to banking, analysis of specific cases of issuance of illegal orders, as well as study of mechanisms for protecting the rights of subjects of banking relations. The purpose of the article is to analyze illegal orders and orders in the banking system in the context of constitutional rights and freedoms. The methodology of the article includes such methods as: analysis method, historical-legal method, comparative method, logical method. As a result of the study, it was concluded that the Constitution of Ukraine enshrines basic rights and freedoms that directly affect the functioning of the banking system. In particular, this is the right to property, entrepreneurial activity, and the right to legal protection. The study showed that these constitutional guarantees are key to protecting the rights of subjects of banking relations from illegal orders and orders. The results of the study emphasize the need to improve the legal regulation of banking activity in Ukraine, in particular by eliminating existing shortcomings in the legislative framework and strengthening the mechanisms for protecting the rights of subjects of banking relations. The implementation of the proposed recommendations will contribute to ensuring legality and law and order in the banking sector and increasing trust in the banking system of Ukraine. [ABSTRACT FROM AUTHOR]

After World War II, France's economic growth was the strongest in its history and the country broke out from the trap of middle-income countries. The "thirty glorious years" was accompanied by the modernization of the economy, in which a strong state control banking system, called the goal-oriented banking system, played a significant role. Through the transformation of the French banking system after World War II, we prove that in the case of a middle-income country, the deepening of the financial intermediary system promotes the modernization of the economy. On the other hand, after a while the too strong state regulation on the banking system will become a limitation because the financial system cannot fulfill its task of economic modernization, as state intervention will limit the deepening of financial intermediation and thus the further modernization of the economy. Finally, we will also examine whether the actors of the financed industries become "lazier" due to the active state intervention in the lending policy, which brings with it the issue of moral hazard. [ABSTRACT FROM AUTHOR]

The research objective is defined as the identification and confirmation of empirical relationships between shadow banking activities and economic development in developing and transitional economies to establish a theoretical basis for minimizing potential risks associated with shadow banking. The methodological design is based on a quantitative approach, implemented through correlation-regression analysis and ARIMA forecasting methods. The research findings confirm Hypothesis 1: China’s shadow banking is closely interconnected with the country’s economic development. However, Hypothesis 2 (the reduction of shadow banking in China contributes to per capita GDP growth) is only supported for specific structural elements of shadow banking that contribute to economic overheating. In contrast, for other structural elements, such as entrusted loans, a strong direct correlation exists, promoting a positive impact of shadow banking on the country’s economic development. This highlights the need for a highly balanced state policy to minimize shadow banking risks. The research results can be valuable for professionals in public administration and academic researchers, particularly in terms of shaping future research directions.

The article analyzes the impact of cyclical financial risks on the economy of Ukraine using the cyclical risk index. The index is designed to monitor the current level of cyclical risks, as well as possible accumulation in the future. Timely identification of risks with the help of an innovative tool gives the regulator enough time to react and implement anti-crisis measures. In addition, the methodology of index evaluation allows you to visualize not only the index, but also its components, which facilitates the interpretation of the used tool. The dynamics of cyclical risks during economic and financial crises is considered and the importance of their analysis for macroprudential policy is noted. The assessment of the cyclical risk index was carried out using the Hodrick – Prescott filter using indicators reflecting new lending, lending volumes, as well as the cost of lending. The indicators taken into account for the assessment of the index are used separately for the sector of households and non-financial corporations. The results of the analysis showed that after the crisis of 2008–2009, the index remained elevated until the next crisis in 2014, with the gap between non-financial corporations lending to GDP remaining positive. However, before the crisis of 2014–2016, there has been an expansion of cyclical financial risks. During 2017–2023, Ukraine was facing two crises: an economic one caused by the COVID-19 pandemic and a political one related to the russian invasion. The Financial Cycle Index did not predict the accumulation of cyclical systemic risks before these crises, but indicated an increase in risks since 2019. After the russian invasion Ukrainian economy suffered a sharp downturn, but the banking system withstood the test, providing liquidity and continuing lending operations. In general, the results indicate the need for an individual approach to the analysis and management of cyclical financial risks, taking into account the specifics of each country, its context, and the particularities of the financial sector.

Relevance. The banking system is a key structure in a market economy. The definition of a «banking system» affects all aspects of its functioning: organizational, legal, and institutional. The banking system can function effectively only if a number of principles are fulfilled that justify the organization of effective monetary circulation that meets the needs of the economy and its expanded reproduction. The national banking system exists in the economic environment of the State in which it operates. Therefore, the study of the banking system of the Russian Federation involves considering it not separately, but together with a set of factors influencing it. Aim. To substantiate the factors of developing the banking system in the Russian Federation through segmentation at the level of the macroenvironment (external indirect impact) and microenvironment (internal direct impact). Methods. General scientific methods of cognition, including comparativism, segmentation, generalization, synthesis, detailing. Tasks. In order to achieve this aim, the segmentation of the factors for developing the banking system in the Russian Federation was carried out, indicating the specifics of the impact. The authors have considered the eterministic analysis models that can be applied to quantify the degree of impact. Results. The factors influencing the banking system can be conditionally divided into internal and external ones. Internal factors have a direct impact on the banking sector development, external factors may indirectly influence it, but this in no way reduces the degree of possible impact. The factors were grouped according to the following criteria: economic, social, man-made, managerial, professional, political, and competitive. It is quite difficult to assess the influence of one or another factor, first of all, for the reason that all the analyzed indicators must be expressed quantitatively. There is also a question about the degree of influence of one or another factor, which should be expressed in terms of coefficients, that is, in any case, there may be a subjectivity of assessment in the calculation, which makes the calculations ambiguous and possibly erroneous. It is advisable to assess the impact of the studied factors using deterministic factor models that will generate a model for the banking system development and formulate strategies for the development of the banking sector and the country economy. Conclusions. The necessity of structuring the factors of banking system development was justified in order to further evaluate them through a deterministic factor analysis in order to bring the results obtained to numerical values.

In the modern world, mortgage plays an important role in the life of the citizens of the country due to its important role in providing their housing needs. Thus, it is important to find the most effective model of mortgage lending for the country to maximize the living standards of its citizens. The aim of the work is to choose the most effective model of mortgage lending that can be used in the country and bring the greatest benefit to it. The main methods used in the research were analysis, deduction, induction, and abstraction. The paper examined various aspects of mortgage lending, focusing on the different payment models and their implications for borrowers. Two types of mortgage loans were considered: with annuity and differentiated payments, their main differences in terms of payment rates were described, and mathematical formulae for their calculation were specified. To illustrate the impact on the borrower of each of them, a theoretical example was provided, on the basis of which the differences between the two systems were described. The paper also describes three models for organizing mortgage lending systems: a closed (stand-alone) mortgage system, a truncated open model and an extended open model. The suitability of these models for the development of the Kyrgyz mortgage market was assessed based on their characteristics and features, positive and negative components. The work brings new knowledge in the context of studying the peculiarities of mortgage lending as a whole, as well as allows finding opportunities for improving its functioning in the Kyrgyz Republic

Objective: to form a model for predicting the default of credit organizations under the modern conditions of the banking sector functioning.Methods: unidimensional analysis of variance, regression analysis of binary choice models.Results: in the modern economy, the banking system stability largely affects not only the financial sector, but also the economic and investment climate in the country. Understanding of the banks’ influence on the economy necessitates the formation of appropriate effective forecasting systems that allow identifying problem banks before revoking their licenses is necessary. The existing methodology of the Bank of Russia is characterized by subjectivity and inaccuracy of assessment. The analysis of studies on predicting bank defaults showed various approaches to the methodology of assessing the probability of credit institutions’ bankruptcy, though they have a number of shortcomings. Based on the selection of key factors affecting the bank’s financial stability, the logistic regression model for predicting bankruptcy of banks was formed. The methodology proposed in this article includes five predictors, selected on the basis of the improved methodology for selecting logit regression variables, and complements the existing methodologies.Scientific novelty: a methodology for assessing the probability of commercial banks’ bankruptcy in the Russian Federation was developed, which includes five key predictors for assessing the bank’s financial stability: return on assets, unit weight of liquid assets in the balance sheet currency, unit weight of the loan portfolio in the balance sheet currency, share of loans to the real sector in the balance sheet currency, and share of long-term placements in the loan portfolio. The logistic regression model of binary choice proposed in the paper allows distinguishing financially stable credit organizations from problem banks with a forecasting horizon of five months and a classification accuracy of 88,33 %.Practical significance: the relatively high classification accuracy of the model allows its use by the Bank of Russia in controlling the credit organizations functioning, as well as directly by the credit organization’s management, in order to assess the organization’s financial stability and to predict the default probability, as well as to form the bank’s development strategy.

The financial system and its components are of interest to economists, researchers and practitioners in the field of banking finance. In Romania more than 77% of the total assets of the financial system are represented by the banking component. Based on this evidence, the paper is an empirical analysis of the evolution of the volume and structure of banking assets in Romania in the period 2020-2023. By analysing the share of foreign versus domestic capital, we also wanted to draw attention to a possible risk of contagion, as external factors have emerged in recent years and are currently affecting the economic and financial balance. The motivation for this paper comes from the fact that the structure and share of foreign capital in the Romanian banking system shows how sensitive the system is to contagion risk. In the current period, when international events are happening rapidly, the study is timely.

Background: Blockchain technology in the banking industry is effective in speeding up the transactions, increasing security, dealing with bank embezzlement and storing customer information, and reducing the time and costs of banking operations. Purpose: The purpose of this research is to map the impact of blockchain technology functions on the Iran's banking system. Method: First of all, the functions of the banking system and blockchain technology are identified using the systematic literature review. In the next step, the functions are screened with Fuzzy Delphi Method (FDM). The statistical sample of the research included 12 senior managers of four banks: Melli, Pasargad, Maskan, and Saderat. Findings: Using systematic literature review method, the functions of the banking system and blockchain technology are identified, and the results are localized with FDM, which finally 13 functions for the blockchain and 5 functions (establishment of the monetary and credit system, value creation, public cooperation, facilitation exchanges and balance of parallel markets) for the banking system are identified. Based on the results of the Intuitive Fuzzy Cognitive Map (IFCM), blockchain leads to the development of an integrated infrastructure between the management systems of banks, customer information management and information exchange. Conclusion: According to the results, the functions of blockchain technology lead the bank stakeholders to implement this technology faster. The results indicate that senior managers of banking system should pay more attention to the important functions of blockchain and solutions. [ABSTRACT FROM AUTHOR]

This article examines the peculiarities of the management of assets and liabilities of Ukrainian banks in the conditions of significant structural transformations of the resource base during the period of martial law. The analysis is carried out at the level of homogeneous structural and functional groups of banks (SFGBs), which are formed using published reporting data and the application of Kohonen's self-organizing map (SOM). Accumulation of statistical data has been carried out for 5 years, special attention is paid to structural changes in the resource base and directions of placement of bank assets over the past two years. Over the past two years, the bank has been under the influence of shock factors affecting assets and liabilities. At the beginning of 2022, there was an outflow of funds from bank accounts, which was gradually compensated by the inflow of current funds from corporations and the population of individuals. In 2023, the National Bank of Ukraine actively stimulated the development of the term resource base, the basis for ensuring the growth of credit operations. Transactions with state securities continue to grow in the structure of bank assets. The priority task of the banking system remains the financial support of business, but in the conditions of a full-scale war, such development of credit operations is limited. It is expedient to study the strategy of banks by combining the structure of assets and liabilities according to similar characteristics and analyzing the dynamics of groups. Observation of homogeneous groups confirms their stable nature, features of strategy, risk profile and development priorities. It has been proven that banks within homogeneous SFGBs demonstrate similar behaviour in the formation of management strategies and reactions to internal and external shocks. At the macro level, the SOM structure allows you to quantitatively assess the main processes taking place in the banking system, conduct comparisons with maps, and identify problems and priorities in the management of bank assets and liabilities. The SFGB method allows you to evaluate the trajectory of individual banks on the map and develop recommendations for improving the strategy of managing assets and liabilities. [ABSTRACT FROM AUTHOR]

The article explores decision-making information technologies in the banking sector utilizing mathematical methods. It delves into the optimal management decision-making tasks and presents a classification of decision support methods used within the banking industry. The study considers methods from fuzzy logic theory and inductive modeling, along with approaches to linguistic terms and the creation of fuzzy knowledge sets for decision-making and choice problems in banking. To simplify complex decision-making problems, strategies such as problem decomposition into simpler subsets, altering the model’s structural hierarchy, aggregation, and identifying reference situations with predetermined solutions are employed. A fuzzy model of the subject matter is developed, focusing on the phasization of variables–identifying linguistic assessments of variables and the membership functions necessary for their formalization. The introduction of rule weights in the fuzzy knowledge base reflects varying levels of confidence in the data, emphasizing the expert’s trust in each selected rule for decision-making. The formation of a general fuzzy knowledge base is detailed. The study validates the efficiency of utilizing neural network learning methods to adjust the parameters of a fuzzy model based on real data. This approach automates the process, significantly reducing both development time and costs while optimizing system parameters. This feature is particularly critical for economic problemsolving, notably in banking support activities, where the rapid pace of changes necessitates constant adaptation of membership functions to the dynamic conditions of the banking system [ABSTRACT FROM AUTHOR]

In this article, the regulatory framework which covers the credit institutions’ operation over time is briefly presented targeting banking stability. That is, the main initial directives of Basel I (BCBS, 1988, 1996 & 1998) are presented, which appear before the existence of the euro, as well as the main changes published by the Basel Committee on Banking Supervision (BCBS), which became known as Basel II (BCBS, 2004 & 2006), but also the changes established as Basel III (BCBS, 2011, 2016, 2017, 2018, 2019 & 2021). In the framework of Basel III, the accompanying liquidity rules for banks are also presented (BCBS, 2013 & 2014). Finally, in conclusion, there is some criticism of this continuous effort for this rigorous regulatory control of the banks. [ABSTRACT FROM AUTHOR]

This study investigates how financial sanctions packages targeting Russia influenced traditional information flow dynamics with other international financial markets and products. While providing empirical evidence regarding the use of payment systems and finance as weapons of war, it is crucial to understand if the market's response to international sanctions diminished as expectations shifted over time. Results, supported by robustness testing procedures, indicate important dynamic information flows relating to specific sanctions after the onset of the Russia-Ukraine war. In particular, those sanctions relating to the exclusion of Russia from the SWIFT payment system and those targeting banks and private wealth resulted in significant contagion effects sourced from all Russian markets examined. Such influence, however, is found to moderate and dilute as investors reconstruct their expectations and valuations. While targeted sanctions appear to impose intended market isolation, it is also associated with significant contagion effects. Although such secondary effects dissipate, they should be seen as important when implementing further targeted sanction packages. [ABSTRACT FROM AUTHOR]

The banking industry in any country ensures, due to the specific nature of its activity, a key role in the functioning of economic mechanisms, with an impact on macroeconomic developments, on the dynamics of the business environment and on the improvement of the Romanian economy. The 32 credit institutions that make up the banking sector in Romania had net assets of 803.4 billion lei in 2023 and have recorded an acceleration in profitability compared to recent years, achieving a net profit of 13.7 billion lei. In addition to the banks' lending role, they also attract deposits, thus protecting the savings of the population and companies. Banks support the economy by granting loans, but it is important that they go to the sectors with the highest development potential and which create wellpaid jobs. [ABSTRACT FROM AUTHOR]

In the context of escalating military and political uncertainties, a crucial component of banking system stability is the establishment of an adequate level of resource provision – liquidity. The research aims to analyze the transmission impact of the banking system's liquidity and its structure on the volumes of financing for the real sector of the economy in the second year of the war in Ukraine. In the conditions of war and the corresponding intensification of military-political threats and uncertainties, the regulator has made numerous complex decisions and restrictions aimed at balancing the challenges with the current situation in financial markets. The research found that the banking sector of Ukraine currently accumulates a significant amount of excess liquidity and demonstrates high profitability. However, in the conditions of war, the transmission mechanism works improperly, requiring constant intervention from the regulator to balance the liquidity of the banking sector and state finances, which, in turn, affects the behavior of commercial banks and changes the structure of their asset portfolios. An analysis of the structure of active operations portfolios of the banking, corporate, and private sectors provide grounds to assert that there is no reason to expect a change in investment behavior from these groups in the perspective of the next year due to the specificity of the conditions imposed by the Ministry of Finance and the regulator. To maintain macroeconomic stability in the national economy in the conditions of martial law it is necessary to introduce conditions to reduce demand for foreign currency and, as an alternative, offer the preservation of savings solvency through simplifying access to investments in government securities for households. The low financial literacy of the population and the underdeveloped stock market in Ukraine, as well as the more complex mechanism of purchasing government bonds or military bonds compared to deposit services, make such investments by the population insignificant and limited in demand. [ABSTRACT FROM AUTHOR]

The article focuses on revisiting economist, Merton Miller's views on financial markets and economic growth, originally published in 1998, in light of recent financial crises. It examines Miller's insights on banking fragility, regulatory challenges, and the interplay between banks and capital markets. It emphasizes the need for comprehensive reforms to address systemic vulnerabilities and warns against regulatory complacency that perpetuates banking crises.

This study aims to explore and evaluate the composition and performance of the loan portfolio of commercial banks in Romania, identifying the main risk factors and development trends. Starting from a historical analysis and reaching the assessment of the impact of some macroeconomic and regulatory factors, the study aims to provide a comprehensive picture of the state of lending in the Romanian context. In this analysis, we will adopt a multidisciplinary methodology, combining statistical analysis, evaluation based on econometric models and qualitative data interpretation, with the aim of providing a comprehensive and detailed perspective. The work will also try to shed light on how lending policies and banking sector regulations have evolved over time and how they influence financial performance and credit risk. [ABSTRACT FROM AUTHOR]

In recent times, there has been a special emphasis on the efficient management of risk while maintaining reasonable performance (not maximizing performance) in credit institutions. Considering the emergence of the COVID-19 pandemic at the global and national levels, the conditions for the depreciation of debtors' (customers') repayment capacity and the increase in associated default risk have been triggered. This necessitates the periodic analysis and mutual agreement with debtors to establish methods for debt recovery and their repayment terms, aiming to reduce credit risk. The investigative process involves studying literature in the field at both national and international levels, using practical skills and the experience gained by a large number of credit institution managers, as well as the practical elements acquired by the author in her role as head of the credit department at Cooperatist Bank Unirea Bra ov. [ABSTRACT FROM AUTHOR]

This paper determines the weights of the key factors for evaluating the performance of the banking system in Iran using the Balanced Scorecard (BSC) and Fuzzy Analytic Network Process (FANP) approaches. This paper first identifies key factors for the performance evaluation and then determines the cause-and-effect relationship between using the DEMATEL approach. The key factors were included in the BSC framework using the experts' opinions and following principles, including the need for all communication to lead to profitability, not considering the causal relationship from more tangible dimensions to intangible dimensions, and eliminating feedback causal relationships. The calculated weights show the maximum importance of the learning and growth dimensions and the minimum importance of the financial dimension. Among the key factors, on-time service is the maximum important, with customer retention being the minimum important. The extracted key factors can evaluate the performance of the country's banking system descriptively and based on the data obtained from declarations or official reports provided by different evaluators. [ABSTRACT FROM AUTHOR]

The article analyzes the strategic aspects of managing foreign economic operations for commercial banks, disclosing their importance, challenges and prospects in the current global economic environment. In particular, the article examines the role of commercial banks in providing financial support and services for international operations, the key challenges they face, and potential development strategies. The purpose of the article is to clarify key aspects of this topic, from discussing the role of banks in financing international operations to the importance of strategic risk management and reviewing the latest technologies that affect this sector. The purpose of the article is to explore the importance of banks in financing and providing financial support for international operations of businesses and investors, to consider various strategies and methods of managing financial, currency and geopolitical risks faced by banks in foreign economic operations, and to study the impact of innovative technologies such as blockchain, artificial intelligence, process optimization and increasing the efficiency of managing foreign economic operations of commercial banks. In today's world, the economy is becoming increasingly globalized, which means that business transactions cross national borders. Commercial banks that manage their cross-border operations properly can provide all their customers with access to financial services anywhere in the world. Foreign economic operations include international trade, which is an important source of economic growth for many countries, and commercial banks that provide financial support and services for international trade contribute to the development of international economic relations. Proper management of foreign economic operations helps banks to significantly reduce the risks associated with currency fluctuations, political instability, or other economic or political factors. [ABSTRACT FROM AUTHOR]

The article examines the efficiency of Ukrainian banks during macroeconomic shocks. It is determined that the main functions of the banking system are the function of financial intermediation and the transformational function. The emphasis is placed on the fact that banks will play a leading role in the post-war recovery of the domestic economy by providing it with credit resources. The purpose of the article is to assess the efficiency of the domestic banking system during destructive events in the economy. The dynamics of the number of banking institutions and their performance over the past 10 years are examined. A significant reduction in the number of banks with a simultaneous increase in their profitability is revealed. The reasons for the reduction in the number of banks are given. A parallel is drawn between the regulatory actions of the National Bank of Ukraine and the financial performance of the banking system. It is proposed to use the DuPont model and the indicator of operational efficiency of banks in assessing the efficiency of the banking system. The efficiency of banking activities is analyzed by assessing the return on assets and capital and the operating efficiency indicator. It is noted that despite the high profitability of banking activities, the operating efficiency indicator has exceeded the conditionally safe level. It is emphasized that the banking system continues to operate efficiently. The results of the assessment of the banking system stability made by the National Bank of Ukraine are considered. It is noted that due to profitable activities, domestic banks were able to increase their capital during the war. The new regulatory requirements for bank capital are described. The forecast indicators of the core capital adequacy ratio are investigated, taking into account operational risk and the impact of the increased corporate income tax rate for banks. The assessment of the sustainability of the banking system of Ukraine at present and soon is summarized. The conclusions on the high efficiency of the banking system and its sufficient sustainability in the face of destructive events in the economy are drawn. The main threats to the financial security of the banking sector are outlined. Proposals are made on how to use the profits of the banking system to ensure further uninterrupted operation of banks.

Cloud computing facilitates the online provisioning of IT resources, and banks are progressively adopting it to enhance operational efficiency. Despite its usefulness, combining cloud services is not without its difficulties. This study examines the pros and cons of using cloud services in banking, focusing on data security, infrastructure stability, and ongoing business functions. For the purpose of this study, we interviewed a number of leaders in the field, such as officials from a major cloud provider and an Omani bank. The importance of addressing environmental considerations, personnel training, data privacy, security, and system integration was highlighted through key insights. It was concluded that, in order to make a smooth shift to the cloud, financial institution employees must have a thorough understanding of its features. The findings of this research add to the ongoing discussion about banking’s embrace of the cloud and provide useful pointers for working with the cloud.

The 2008 U.S.A. financial crisis, which subsequently spread around the world, showed that financial distress in the banking network could spread to the network of all financial institutions and the entire economy of a country. For this reason, the development of accurate measurements of the risk of transmission of financial distress by each bank in the banking network is very important in controlling the risk of financial intermediation in every country. However, an issue that has not received much attention in previous research is the impact of macroeconomic factors on the risk of spreading financial distress. This is important because governments can anticipate the possibility of an economic crisis by anticipating an increased risk of spreading financial helplessness and adopting monetary and fiscal policies to reduce such risk. The present study, in three stages, estimates the risk of financial distress using the KMV method, estimates the risk of transmission of financial distress using the VAR method, and models the effects of macroeconomic variables such as inflation, exchange rate, and GDP on the risk of contagion. Based on the results, it is clear that GDP has a statistically significant inverse relationship with the risk of transmission of financial distress, meaning that with increasing GDP, the risk of transmission of financial distress is expected to decrease. Also, the relationship between the exchange rate and the risk of transmission is direct and significant, and an increase in the exchange rate leads to an increase in the interdependence of financial institutions and, consequently, an increase in the risk of transmission of financial distress.

Nowadays, technology has become an integrant part of our lives, constantly enriching and transforming different sectors of the economy. The Romanian banking system is no exception, and the use of artificial intelligence (AI) has become a necessity to maintain its competitiveness, streamline its operations and provide a quality experience to its customers. This article aims to explore the importance of implementing AI in the Romanian banking system and how it can contribute to increasing the added value for customers and banks.

Objective: to determine the peculiarities of forming the banking system in late imperial China in terms of the interaction between traditional Chinese banking institutions, imported institutional forms, and state reform strategies. Methods: qualitative methods (comparative analysis, generalization), historical and genetic method.Results: based on a wide array of historical data, the history of the Chinese banking system development during the Qin dynasty decline is demonstrated. By the time of the Chinese economy “forced opening” by Western powers during the Opium Wars, China had its own quasi-banking institutions based on the established clan networks of trade organizations that covered the credit needs of the traditional economy. The local development of modern industries in China required modern approaches to the organization of banking activities. The lacuna was filled by foreign banks, which actually monopolized modern banking in China, and later by state-owned banks. It is shown that by the end of the Qing period all three participants of the banking industry – traditional banks, foreign banks and state banks – covered the needs of the Chinese economy. It is concluded that the banking industry of the late imperial period was a mosaic institutional fabric, combining both traditional and westernized elements and embedding clan ties traditional for China.Scientific novelty: the article is the first attempt in Russia to comprehensively examine the evolution of the banking system of late Qing China.Practical significance: the main conclusions of the article can be used in scientific and pedagogical activities in the study of economic history of traditional China, and may enrich the concepts of institutional economics concerning the limits and possibilities of institutional transformations.

In the context of martial law and the State budget deficit, the profitability of systemically important banks plays a key role in supporting the national economy as a whole. Changing economic conditions and growing competition in the financial services market impose certain requirements on banks and require them to constantly analyze the external environment and improve their performance. As banks are focused on making a profit, which is the main goal of their activities, management of profit formation is one of the key functions of banks. Thus, given the variability of the external environment, the issue of management of profit formation is relevant and requires research both at the level of individual banks and at the level of the banking system as a whole. The aim of the article is to define the theoretical aspects of bank profit and to conduct a practical study of profit formation of a systemically important market participant - JSC CB «Privatbank». The objectives of the article are to define the concept of «profit» and its components, to conduct an analytical study of the financial results of the banking system and JSC CB "Privatbank", to conduct a correlation and regression analysis of profit and to identify the main directions of its formation. The article applies such research methods and techniques as abstraction, specification, theory development, as well as methods of analysis, evaluation and modeling. The article defines the relevance of this topic, considers theoretical definitions of the concept of "bank profit", its bibliographic component, provides the authors' own definition of the studied concept, analyses financial results and indicators of profitability of the banking system, analyses profit indicators of JSC CB "Privatbank", conducts correlation and regression analysis using the least squares method, and draws conclusions on the analysis of bank profit formation. Further research will help to specify the influence of factors on the formation of profit and identify ways to maximize it in the context of crisis phenomena.