Financial stability of the banking system of Ukraine in the conditions of war
Authors: Sadura Oksana , Pidhayna Andriana 
Published: November 2023

For more than a year now, Ukraine has been fighting back against Russia's full-scale aggression, defending its independence. The war took tens of thousands of human lives, mutilated human destinies, and thousands of square kilometers of Ukrainian land. The financial stability of the banking system is the most critical aspect of Ukraine's economic stability and national security, especially in military conflicts. War poses several complex challenges to banks, requiring them to manage risks and respond to adverse economic changes effectively. As a result, there is a need to assess the financial stability of the banking system in the face of a full-scale invasion. The purpose of the article is to study and analyze the impact of the military conflict on the financial stability of the banking system of Ukraine. Based on today's observations, it is developing specific strategies and recommendations for ensuring financial stability in the context of military conflict. Results. The article examines the problem of financial stability of the banking system of Ukraine in wartime conditions. The study focuses on identifying key aspects and challenges that arise before banks in military conflicts. The role of banks in ensuring the country's economic stability and national security in the conditions of war is analyzed. Namely, attention is focused on the profitability of the banking sector and the factors that affect it. A parallel was drawn between the NBU discount rate and certificates of deposit. The level of liquidity of the banking sector is characterized. In the article, much attention is paid to the characteristics and assessment of the role of state banks. In conditions of high military risks and significant uncertainty, these banks actively support lending, mainly state-owned enterprises, keep records for government payments, and provide access to banking services through a vast network of branches. They continue to hold the leadership in terms of the size of the network and the attractiveness of public funds, provide loans, and are the most active participants in the state mortgage lending program "eOsel". Measures to improve the financial stability of the banking system of Ukraine during the war are recommended, considering the aspects listed above. To ensure financial stability in the challenging conditions of wartime, concerted efforts, and close coordination of actions of all participants of the financial market are needed: banks, non-bank financial institutions, the National Bank, and other market regulators, as well as adequate support of state authorities. The study suggested that banks optimize the costs of maintaining their networks while ensuring the maximum availability of their services, and state-owned banks update their strategies to address the main weaknesses of their operations and prepare for privatization after the end of hostilities. Despite the difficulties, it is essential to note that the experience and support of international organizations can play a huge role in strengthening the financial stability of Ukraine's banking system in wartime conditions. Joint efforts and professional response of financial institutions are essential factors that will contribute to ensuring financial stability in the country, even during significant military conflicts.
Keywords: financial stability, martial law, banking system, instruments for ensuring financial stability.