FINANCIAL RISKS IN THE BANKING SYSTEM: THEORETICAL AND PRACTICAL COMPONENTS

Abstract

This article examines the theoretical and conceptual principles underlying the functioning of banking institutions within the national financial system. It explores the primary paradigms regarding the causes, types, and management methods of financial risks in the banking sector, emphasizing the evolutionary nature of risk formation at the macro-financial level. To achieve these scientific objectives, the study employs empirical, theoretical, synthetic, abstract, and generalizing methods. These approaches facilitate a comprehensive macro-financial analysis, projecting established financial theories onto the modern realities of Ukraine's financial system to improve the detection, assessment, and management of banking risks.
The research highlights key discussions surrounding financial risks and their mechanisms of occurrence, particularly within the banking sector, which is deeply interconnected with the broader business environment. By comprehensively analyzing the financial environment, the study identifies core problems raised by financial scholars and offers a novel perspective on adapting risk identification and monitoring protocols at the institutional level.
Based on these findings, the article proposes strengthening the central bank's role in the monetary market to enhance the management of financial relations. This strategic shift aims to reduce the likelihood of financial risks, improve the banking system's stability amidst the hybrid aggression of hostile states, and ensure the long-term stabilization of the national financial system and business activity.