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DOMINANTS OF INSTITUTIONAL MODERNIZATION OF FINANCIAL SYSTEM OF UKRAINIAN

on .

UDC330.341.2:336.13(477)
 
MAZARAKI Anatoliy,
E.D., Professor, Rector of 
Kyiv National University of Trade and Economics

VOLOSOVІCH Svitlana,
E.D., Professor of Finance Departament 
Kyiv National University of Trade and Economics
 
DOMINANTS OF INSTITUTIONAL MODERNIZATION OF FINANCIAL SYSTEM OF UKRAINIAN
 
Background. Ukraine's membership in the EU is the strategic goal of Ukrainian foreign policy. Strengthening integration processes and implementation of qualitative transformation in all spheres of social life require adequate transformation of Ukrainian financial system. In this case modernization of the institutional component of the financial system according to the requirements of the international community in general and of the European Union in particular takes on particular importance.
The aim is to determine the values and priorities of institutional modernization of the financial system of Ukraine in conditions of intensification of its integration into the international financial area.
Materials and methods. The study was conducted using methods of theoretical generalization, comparative analysis, analysis and synthesis which allowed reveal the course of institutional modernization of the national financial system in accordance with international requirements, international experience and national interests of Ukraine.
Results. Secondary or overtaking modernization is the basis of transformation processes of the institutional component of the domestic financial system. The main goal of the financial system’s institutional modernization of Ukraine should be the formation of modern financial institutions that contribute to the restoration of positive dynamics of economic growth under conditions of deepening integration processes. Thus its main objectives are the following: to improve the investment climate; to improve the governance and public financial management; to expand the social orientation.
Requirements imposed on institutional modernization of Ukraine's financial system ensure integration with the world community through national unification and harmonization of international institutions and national and international financial legislation; consideration of positive foreign experience; promotion of entrepreneurial initiatives and growth of the national economy’s competitiveness; prevention of systemic risks, their minimization and consequences elimination; guarantee of its subjects’ interests protection. Institutional modernization of Ukraine's financial system should correspond to the following principles: unity, validity, subsidiarity, transparency, complementarity, socialization, efficiency and effectiveness, evolutional development, monitoring.
Creation of the National Council of Reforms is an institutional foundation of Ukraine's financial system modernization. Principles laid down by international economic and financial institutions form the guideline of financial stability in Ukraine.
Conclusion. Under the conditions of globalization challenges and intentions of European integration of civil society institutional modernization of the national financial system should go through overtaking way considering demands of the international community, positive foreign experience and national interests. The changes of its institutional component lie in transformation of individual institutions and institutional environment as a whole. At the same time these changes are complex because Ukraine has to provide stabilization and further economic growth as well as prevent the destruction of the institutional component in terms of radical reforms. These actions will facilitate growth of entrepreneurial activity and risk management efficiency; uniformity of consumption; overcoming of social inequality; improvement of moral and psychological state of the households; reduction of social burden on public finance; decline in volume of informal credit markets.
 
Keywords: modernization, institutional support, financial system, financial stability, financial inclusion, financial exclusion, business ombudsman.

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