Ensuring the Financial Stability of the Banking System of Ukraine in the Conditions of Internal and External Shocks

Oksana S. Novak, Serhii M. Zashchypas (), Yevhenii V. Sliusar (), Roman S. Chaikovskyi () and Yaroslav I. Burtsev ()
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Oksana S. Novak: Department of Finance and Digital Economy, Zhytomyr Polytechnic State University, Chudnivska St 103, Zhytomyr 10005, Ukraine
Serhii M. Zashchypas: Department of Finance and Digital Economy, Zhytomyr Polytechnic State University, Chudnivska St 103, Zhytomyr 10005, Ukraine
Yevhenii V. Sliusar: Department of Finance and Digital Economy, Zhytomyr Polytechnic State University, Chudnivska St 103, Zhytomyr 10005, Ukraine
Roman S. Chaikovskyi: Department of Finance and Digital Economy, Zhytomyr Polytechnic State University, Chudnivska St 103, Zhytomyr 10005, Ukraine
Yaroslav I. Burtsev: Department of Finance and Digital Economy, Zhytomyr Polytechnic State University, Chudnivska St 103, Zhytomyr 10005, Ukraine

Journal of International Commerce, Economics and Policy (JICEP), 2025, vol. 16, issue 02, 1-27

Abstract: The aim of this paper is to examine strategies used to strengthen the financial stability of Ukraine’s banking system focusing on the role of systemic risk factors, foreign capital, and financial innovations. The research develops a framework for assessing financial stability by identifying key shock factors and their impacts. This approach uses the financial stress index, clustering analysis, and analytic hierarchy process to assess stability and prioritize solutions. As a result, it is proven that the strengthening of the influence of foreign banking capital on the FSBS leads to the development of the banking business, the creation of new jobs, the introduction of the latest technologies, and the creation of additional value of banking products. Moreover, a methodical toolkit is developed to identify reserves to strengthen financial stability in the banking system. The research highlights the interplay between external shocks and financial stress indices during the Russian-Ukrainian war. It provides insights into mitigating financial instability and reinforces the critical role of regulatory frameworks in adapting to economic crises.

Keywords: Financial stability; banking system; shock factors; financial stress index; financial innovations (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1142/S1793993325500073

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