Ways of credit policy optimization as a guarantee of the bank’s financial security

Keywords: credit policy, credit risk, bank credit, credit management, banking security, financial security.

Abstract

The article examines the theoretical foundations of the bank’s credit policy in the context of strengthening the bank’s financial security. It was found that in the context of the spread of coronary heart disease COVID-19 and during the Russian invasion of Ukraine in 2022, certain threats to banking security are increasing. The directions of improvement of formation of credit policy of bank by development of effective strategy of development of banks in the context of monetary policy of NBU and flexible system of credit management are offered.

The purpose of the article is to study the theoretical foundations of banks’ credit policy and to develop practical recommendations for minimizing existing risks and negative influences in the context of strengthening banking financial security.

The scientific novelty s the study of the theoretical foundations of the bank’s credit policy in the context of strengthening the financial security of the bank. The author’s definition of the essence of the category «credit policy» is formed and its role in ensuring the development of the bank lending system is attributed. The state of some financial indicators of Ukrainian banks’ activity is analyzed, the level of interest rates on loans and the reduction of retail lending, as well as the growth of credit risk indicators are recorded. According to the results of the research, the ways of forming an effective strategy of banks’ development are proposed, in particular, taking into account the factors of influence at each of its stages, using the latest digital credit instruments and products, applying a flexible credit management system.

Conclusions. The study allowed the author to form his own vision of the essence of the category of «credit policy» and clarified the importance of its impact in ensuring the development of bank lending. It is known that the situation is complicated by certain threats to the development of the bank lending system, including changes in the loan portfolio of banks, rising lending rates and declining credit potential of individuals, as well as increasing credit risk in the spread of coronary heart disease COVID-19 year.

We believe that the development of an effective credit policy strategy of the bank should be carried out taking into account possible external and internal factors, a detailed forecast of financial market conditions, determining the allowable amount of credit resources, reasonable capital growth rates, etc.

When developing the bank’s credit policy, the latest credit instruments and products should be used, and the introduction of innovative technologies should be promoted, which will allow taking into account possible market fluctuations. Creating an effective and flexible credit management system will be the basis of financial stability and profitability of banks, and hence the proper financial security of the bank.

References

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PDF Downloads: 27
Published
2022-05-02
How to Cite
Glushchenko , Y. (2022). Ways of credit policy optimization as a guarantee of the bank’s financial security . Scientific Papers of the Legislation Institute of the Verkhovna Rada of Ukraine, (2), 111-118. https://doi.org/10.32886/instzak.2022.02.12