STRATEGIC DIRECTIONS OF STRENGTHENING FINANCIAL SECURITY OF UKRAINE

  • Iryna Revak
Keywords: financial security, financial system, public debt, banking system, fiscal-tax sphere, currency exchange rate policy, non-bank financial sector

Abstract

The problem of protecting national interests, in particular in the financial sphere becomes very actual under modern conditions of the intensification of the processes of financial globalization and the weakening of state regulation and control. Financial security of the state is the most important priority of the state's economic policy, and the formation of the economy of an innovative type depends on the stability of the domestic economic system, its investment attractiveness and competitiveness. Protection of the national monetary unit from external fluctuations, ensuring stability of interest rates, increasing capitalization of the stock and insurance markets, and rational fiscal regulation of the economy are those initial postulates that guarantee a high level of financial security in the country.

The purpose of the article is to identify strategic directions for further reforming the debt, fiscal and tax, banking, exchange rate policy in order to strengthen Ukraine's financial security. The achievement of the stated purpose included the following tasks: systematization of scientific and applied tools for ensuring macroeconomic stabilization in the financial sector; to ground strategic priorities of strengthening of financial security of the state taking into account its components.

Financial security is the fundamental basis of a cost-effective state, which is responsible for long-term policy of financial stabilization and economic growth. According to experts' forecasts, Ukraine's development over the next decade will be taking place in extremely complex international relations and in conditions of fierce competition in financial markets. The necessity to consolidate economic and financial interests at both macro and micro levels is an indispensable condition for further reform of the financial sector and ensuring balanced development of the national economy as a whole. Bearing in mind this aim it is necessary to outline key areas for implementing financial policy and identify strategic priorities for strengthening Ukraine's financial security.

Summarizing the strategic guidelines for strengthening Ukraine's financial security, we emphasize the need:

To approve the Strategy of financial security of the state by the Verkhovna Rada of Ukraine, which will determine the political and economic course of activity of financial institutions of state power, investment, financial and credit, banking institutions, aimed at ensuring financial stability and economic growth.

To activate the policy of management of the state debt of Ukraine, which provides the minimization of risks of state and corporate borrowings by balancing the structure of state and corporate debt depending on the  types of currencies, interest rates and terms of debt repayment; introduce brutal control over the targeted use of funds received from international financial institutions; shift emphasis on increasing domestic sources of funding, stimulate the population of Ukraine to transform unorganized savings into investment resources.

Develop and adopt a Banking Code in order to bring current banking legislation in line with EU norms, rules and requirements, which will include relevant articles on the security of the money market. Such an institutional step will make it possible to strengthen the stability of the Ukrainian banking system, provide better predictability, and make the interests of all participants more secure.

To implement measures to increase the competitiveness of the national stock and insurance market, to promote the level of protection of interests of consumers of insurance services and all participants in the securities market. Ensure the implementation of pension reform, in particular regarding the development and intensification of the processes of formation of non-state pension funds and the system of personal pension accumulation.

Home banks should have a more flexible interest rate policy in order to attract clients' funds in the national currency, and the National Bank of Ukraine should facilitate the accumulation of foreign exchange reserves.

To develop and implement an effective system of financial control that involves the collection and analytical processing of information, analysis of primary threats, continuous monitoring of financial security indicators, forecasting conditions and implementation of specific measures to maintain an adequate level of financial security of the state.

Published
2018-03-06