The improvement of credit operations management in commercial banks of Ukraine in the conditions of financial crises

UDC 336.77.01:330.567.22

A. Krychyniuk

The article is devoted to the improvement of credit operations` management in commercial banks of Ukraine in the conditions of financial crises. The estimation of the quality of credit operations, the credit policy and authenticity implementation of norms of credit activity of the most representative banks of Ukraine of four groups in size of assets during 2011-2014 is given. We found out the reasons of appearance of considerable parts of problem with credit operations of commercial banks of Ukraine. We had developed the ways of the perfecting of management of credit operation of commercial banks of Ukraine. We offer to change the heads of financial management in Ukraine. We offer to bring to trial the previous heads of financial management in Ukraine who ruled during 2011-2014 years. We offer to owners of commercial banks and the Regulator to reimburse by their own funds and property the debts to the depositors. We offer to forbid banks to lend their owners and top-managers. We offer to regulator to force commercial banks to carry out economic standards. We offer to change managers of risk management department, the credit committee, department of internal audit, credits department and others. We offer to tighten control on the knowledge and implementation of credits policy of employees of commercial banks of Ukraine. We offer to reveal the lending policies of commercial banks in Ukraine to enable evaluation, correction and improvement specialists.
We offer to develop and implement modern educational programs for professional education and training of specialists of banks. We offer to hire staff in banks only in the specialty for which they were educated. We offer to hire in banks on a competitive basis, and not on personal ties or other reasons.We offer to increase the requirements for the professionals of department of risk management, the credit committee, department of internal audit, credits department and others.
We offer to increase the demands on the creditworthiness of borrowers of commercial banks.
We offer to commercial banks to develop and implement ways to reduce the impact of the financial crisis on the finances of borrowers.We offer to publish internal regulations of banks, which determine the order and procedures of internal control and risk management, credit process for their evaluation and improvement specialists.We offer to increase the number of state-owned banks.
We offer to the organs of state financial management of Ukraine to develop and implement a program of massive public works to reduce the financial crisis in Ukraine.

The improvement of credit operations management in commercial banks of Ukraine in the conditions of financial crises.

References:

1. Vasiurenko O. Efektyvnist kredytuvannia fizychnykh ta yurydychnykh osib banka-my Ukrainy. Metodolohiia analizu stokhastychnykh hranyts [Elektronnyi resurs] / O. Vasiurenko, V. Liashenko, V. Podchesova // Visnyk Natsionalnoho banku Ukrainy : shchomisiachnyi naukovo-praktychnyi zhurnal NBU. – K. : Natsionalnyi bank Ukrainy, 2014. – # 1. – S.5-19. – Rezhym dostupu do zhurnalu : http://www.bank.gov.ua/doccatalog/document?id=4881646. – Data ostannoho dostupu 24.02.2016. – Nazva z ekranu.
2. Manzhos S. Antykryzovyi menedzhment u protsesakh pokrashchennia yakosti kredytnoho portfelia bankivskykh ustanov Ukrainy [Elektronnyi resurs] / S.Manzhos // Sotsialno-ekonomichni problemy i derzhava: elektronne naukove fakhove vydan-nia. – 2013. – Vyp. 1 (8). – S. 151–160. – Rezhym dostupu do zhurn. : http://sepd.tntu.edu.ua/images/stories/pdf/2013/13msbbuu.pdf.
3. Voloshyn I. Upravlinnia kredytnym ryzykom banku v umovakh shvydkoho zrostannia obsiahiv kredytuvannia [Elektronnyi resurs] / I. Voloshyn // Visnyk Natsionalnoho banku Ukrainy : shchomisiachnyi naukovo-praktychnyi zhurnal NBU. – K. : Natsionalnyi bank Ukrainy, 2015. – # 1. – S.36 –42. – Rezhym dostupu do zhurnalu: http://www.bank.gov.ua/doccatalog/document?id=13291937. – Data ostannoho dostupu 24.02.2016. – Nazva z ekranu.
4. Sitnikova N. Upravleniye kreditnymi riskami [Elektronnyy resurs] / N. Sitnikova // Entsiklopediya finansovogo risk-menedzhmenta ; Alt-invest; pod. red. kand. ekon. nauk A. A. Lobanova i A. V. Chugunova. – 4-ye izd., ispr. i dop. – Moskva : Al’pina biznes buks, 2009 . – S.373-487. – Rezhim dostupu: http://www. alt-invest.ru/files/ Enciklopedia_finrisk-2008_gl5.pdf . – Data poslednego dostupa 24.02.2016. – Nazvaniye s ekrana.
5. Berger A. Problem Loans and Cost Efficiency in Commercial Banks [Electronic resource] / A. Berger, R. DeYoung // Forthcoming: Journal of Banking and Finance. – Washington: Wharton Financial Institutions Center, 1997. – Vol. 21. – R. 112-115. – Mode of access : http://www.federalreserve.gov/pubs/feds/1997/199708/199708 pap. pdf . – Data ostannoho dostupu 24.02.2016. – Nazva z ekranu.
6. Caprio G. Jr. Bank Insolvency. Bad Luck, Bad Policy, or Bad Banking? [Electro-nic resource] / G. Caprio Jr., D. Klingebiel // Annual World Bank Conference on Development Economics. – [Washington]: The International Bank for Reconstruction and Development ,The world bank, 1996. – R. 1-26. – Mode of access : http://sitere-sources.worldbank.org/DEC/Resources/18701_bad_luck.pdf. – Data ostannoho dostupu 24.02.2016. – Nazva z ekranu.
7. Huang X. Assessing the systemic risk of a heterogeneous portfolio of banks during the recent financial crisis [Electronic resource] / X. Huang, H. Zhou, H. Zhu //Journal of Financial Stability. – 2012. – Vol. 8, Issue 3. – P. 193–205. – Mode of access : https://www.newyorkfed.org/medialibrary/media/research/conference/2011/global_sys_risk/Assessing_SystemicRisk_HeterogeneousPortfolio_Banks_Recent_Financial_Crisis.pdf. – Data ostannoho dostupu 24.02.2016. – Nazva z ekranu.
8. Zvity banku [Elektronnyi resurs] / Raiffaizen bank aval. – Elektron. tekstovi dan. – Ukraina, 2016. – Rezhym dostupu: https://www.aval.ua/about/ bank_reports. – Data ostannoho dostupu 24.02.2016. – Nazva z ekranu. – Vidomosti zibrani za 2011-2014 roky.
9. Zvity Banku [Elektronnyi resurs]/ Otp-bank. – Elektron. tekstovi dan. – Ukraina, 2016. – Rezhym dostupu: https://www.otpbank.com.ua/about/informations/ annu-al_reports/. – Data ostannoho dostupu 24.02.2016. – Nazva z ekranu. – Vidomosti zibrani za 2011-2014 roky.
10. Finansova zvitnist [Elektronnyi resurs] / Platynum bank. – Elektron. tekstovi dan. – Ukraina, 2016. – Rezhym dostupu: http://ua.platinumbank.com.ua /view.finrep/ . – Data ostannoho dostupu 24.02.2016.  – Nazva z ekranu. – Vidomosti zibrani za 2011-2014 roky.
11. Finansova zvitnist [Elektronnyi resurs] / Industrialbank. – Elektron. tekstovi dan. – Ukraina, 2016. – Rezhym dostupu: http://industrialbank.ua/ua/about/fin_rep_ukr/. – Data ostannoho dostupu 24.02.2016.  – Nazva z ekranu. – Vidomosti zibrani za 2011-2014 roky.
12. Valeriia Hontareva. Tsi statky y tsia tak zvana oliharkhiia — duti bulbashky [Elektronnyi resurs] / Yu. Skolotianyi, Yu. Samaieva. – Elektron. tekstovi dan. – Ukraina, 2015. – Dzerkalo tyzhnia. Ukraina. – #36-37. – Rezhym dostupu: http:// gazeta.dt.ua/macrolevel/valeriya-gontaryeva-ci-statki-y-cya-tak-zvana-oligarhiya-duti-bulbashki-_.html. – Data ostannoho dostupu 24.02.2016.  – Nazva z ekranu.
13. Bankivska systema trymaietsia lyshe na 30 naibilshykh bankakh, reshtu treba chystyty – Hontareva [Elektronnyi resurs] / Televiziina sluzhba novyn. –Elektron. tekstovi dan. – Ukraina, 2015. – Rezhym dostupu: http://tsn.ua/groshi/ bankivska-sistema-trimayetsya-lishe-na-30-naybilshih-bankah-reshtu-treba-chistiti-gontareva-505855.html. – Data ostannoho dostupu 24.02.2016. – Nazva z ekranu.
14. Vyvedennia bankiv z rynku [Elektronnyi resurs] /Fond harantuvannia vkladiv fizychnykh osib. – Elektron. tekstovi dan. – Ukraina, 2015. – Rezhym dostupu: http:// www.fg.gov.ua/not-paying. – Data ostannoho dostupu 24.02.2016. – Nazva z ekranu. – Vidomosti zibrani za 2015 rik.
15. Zakon Ukrainy pro Natsionalnyi bank Ukrainy [Elektronnyi resurs] / L. Kuchma. – Elektronni tekstovi dani. – Kyiv,1999. – Rezhym dostupu: http://zakon3. rada.gov.ua/laws/show/679-14/print1453912720283835. – Data ostannoho dostupu 24.02.2016. – Nazva z ekranu.
16. Konstytutsiia Ukrainy [Elektronnyi resurs] / Verkhovna Rada Ukrainy. – Elektronni tekstovi dani. – Kyiv, 1996. – Rezhym dostupu: http://zakon3.rada.gov .ua/laws/show/254k/96-vr/print1453912720283835. – Data ostannoho dostupu 24.02.2016.  – Nazva z ekranu.

Issue 1(88). 2016

The reformation of activity of ratings agencies at the micro level of the banking system of Ukraine

UDC 336.77.01:330.567.22

Krychyniuk A., Master of Banking, Post Graduate student, Department of Finance and Banking, European University, Ukraine.

The article is devoted to the reformation of activity of ratings agencies at the micro level of the banking system of Ukraine. The estimation of the reliability assessment of credit ratings by the most representative group of four banks of Ukraine according to the assets’ size during 2014 year is given.We found out the reasons of appropriation of the unreliable credit ratings the of chosen banks. We had developed  the variants of eliminating the causes of incorrect assignment of credit ratings.
We compare the credit ratings of the credits’ quality of typical operations with the help of four groups of banks in Ukraine 2014, and we can conclude that the typical representative of the first group is “Privatbank”, the typical representative of the second group is Credit Agricole Bank, the typical representative of the third group is “Pravex bank” and the typical representative of the fourth group is “ProCredit Bank” have the unreliable long-term credit ratings.
We offered the variants of reforming rating agencies Fitch Ratings and Ekspert-reytynh.
We offer to change the model of income that investors pay for assignment of credit rating debt securities. We offer to create the fund in order to finance the rating agencies at the expense of all participants of the financial system. It will minimize the conflicts of interests and  reduce the dependence on customers.
We offer to prohibit any consulting services by rating agencies.
We offer to make the open public exact oficial methodology with the possibility of  the methodological evaluation and improvement by the specialists. We offer to increase the professional level of the specialists who develop and calculate the credit ratings.We offer to analyze and improve the methodology of assessing the creditworthiness of banks and debt securities. We offer to increase competition among the rating agencies. We offer to increase quantity of authorized and nationally recognized rating agencies significantly.
We offer to determine credit ratings the unauthorized and unrecognized ratings agencies.

Keywords: reformation of activity of rating agencies, credit rating, credit rating agencies, bank creditworthiness, conflict of interests, debt obligations, credit risk, a bank.

The reformation of activity of ratings agencies at the micro level of the banking system of Ukraine.

Referenses:
1. Dolinśký L. Pobudova intehraĺnoho kredytnoho rejtynhu bankivśkoji systemy Ukrajiny [Elektronný resurs] / L. Dolinśký, O. Kovaĺčuk // Visnyk Nacionaĺnoho banku Ukrajiny : ščomisiačný naukovo-praktyčný žurnal NBU. – K. : Nacionaĺný bank Ukrajiny, 2012. – Režym dostupu do žurnalu : http://www.bank.gov.ua/doccat alog/document?id=116489. – Data ostannioho dostupu 15.11.2015. – Nazva z ekranu.
2. Jurkevyč O.M. Kredytni rejtynhy jak instrument ocinky kredytnoho ryzyku [Elektronný resurs] / O.M. Jurkevyč // Nauka j ekonomika. – 2013. – №4, t.1. – S.75-79. – Režym dostupu : http://fef.kne u.edu.ua/get_file/2411/. – Data ostannio-ho dostupu 15.11.2015 – Nazva z ekranu.
3. Plastun O.L. Mižnarodni investycijni rejtynhy jak zasib usunennia informa-cijnoji  asymetriji na makroekonomičnomu rivni [Elektronný resurs] / O. L. Plastun, O. V. Dudkin // Marketynh i menedžment innovacij. – 2012. – №3. – S. 191-198. – Režym dostupu : http://nbuv. gov.ua/j-pdf/Mimi_2012_3_20.pdf. – Data ostannioho dostupu 15.11.2015. – Nazva z ekranu.
4. Plešakova N. Mižnarodni rejtynhy u vyznačenni finansovoji stabiĺnosti Ukrajiny [Elektronný resurs] / N. Plešakova // Vestnik Kiyevskogo natsional’nogo universiteta imeni Tarasa Shevchenko. Ekonomika. – 2014. – vol. 13, issue 154. – 112-115.  – Režym dostupu :  http://visnyk.socionet.ru/files/154_112115. pdf. – Data ostannioho dostupu 15.11.2015.  – Nazva z ekranu.
5. Karminskiy A.M. Reytingi kak mera finansovykh riskov. Evolyutsiya, nazna-cheniye, primeneniye [Elektronnyy resurs] / A.M. Karminskiy, A.A. Peresetskiy. // Zhurnal novoy ekonomicheskoy assotsiatsii. – 2009. – № 1-2. – S. 86-103. –Elektron. tekstovyye dan. – Rossiya, 2009. – Rezhim dostupa : ftp://ftp.repec.org/ opt/ReDIF/RePEc/ne a/ journl/ 2009-1-2-86-102r-tegi_16-12.pdf. – Data poslednego dostupa 15.11.2015. – Nazvaniye s ekrana.
6. Moiseyev S. Regulirovaniye deyatel’nosti reytingovykh agentstv na natsion-al’nom rynke [Elektronnyy resurs] / S. Moiseyev. // Voprosy ekonomiki. – 2009. –№2. – S. 39-50. – Rezhim dostupa : http://research.synergy.edu.ru/general/ upload/content_list /cei/moiseev2-09.pdf. – Data poslednego dostupa11.2015. – Nazvaniye s ekrana.
7. Sylla R. A historical primer on the business of credit ratings [Electronic resource]: prepared for conference on “The Role of Credit Reporting Systems in the Internatio-nal Economy,” The World Bank, Washington, DC, March 1-2, 2001. / Richard Sylla. – Electronic text data. – Washington, 2001. – Mode of access : http: //www1.world bank.org/finance/assets/images/Historical_Primer.pdf. – Data ostannioho dostupu 15.11.2015. – Nazva z ekranu.
8. Reinhart C. Ratings, rating agencies and the global financial system: summary and policy implications [Electronic resource]: MPRA Paper No. 13249, posted 8. Febru-ary 2009 05:33 UTC // Munich Personal RePEc Archive / Carmen Reinhart, Richard Levich, Giovanni Majoni. – Electronic text data. – New York: Kluwer Academic Press, 2002. – Mode of access : https://mpra.ub.unimuenchen.de/13249/1/Ratings. pdf. – Data ostannioho dostupu 15.11.2015.  – Nazva z ekranu.
9. Bolton P. The credit ratings game [Electronic resource]: NBER working paper series // National bureau of economic research / P. Bolton, X. Freixas, J. Shapiro. – Electronic text data. – USA: Cambridge, 2009. – Mode of access : http://www.nber. org/papers/ w14712.pdf. – Data ostannioho dostupu 15.11.2015.  – Nazva z ekranu.
10. Nacionaĺna komisija z cinnych paperiv ta fondovoho rynku [Elektronný resurs] / Nacionaĺna komisija z cinnych paperiv ta fondovoho rynku. – Elektron. tekstovi dan. – Ukrajina, 2015. – Režym dostupu: http://www.nssmc.gov.ua/fund/ rateagencies. – Data ostannioho dostupu 15.11.2015. – Nazva z ekranu.
11. Zakon Ukrajiny pro deržavne rehuliuvannia rynku cinnych paperiv v Ukrajini [Elektronný resurs] / L.Kučma. – Elektron. tekstovi dan. – Ukrajina, 1996. – Režym dostupu: http://zakon4.rada.gov.ua/laws/show/448/96-vr/print14471582 29228644. – Data ostannioho dostupu 15.11.2015.  – Nazva z ekranu.
12. Nationally Recognized Statistical Rating Organizations (“NRSROs”)[Electronic resource] \U.S. securities and exchange Commission. – Electronic text data. – USA, 2015. – Mode of access : http://www.sec.gov/ocr/ratingagency.html. – Data ostanni- oho dostupu 15.11.2015. – Nazva z ekranu.
13. Položennia pro poriadok formuvannia ta vykorystannia bankamy Ukrajiny rezerviv dlia vidškoduvannia možlyvych vtrat za aktyvnymy bankivśkymy opera-cijamy [Elektronný resurs] / N.V. Ivanenko. – Elektronni tekstovi dani. – Kýiv, 2012. – Režym dostupu: http://zakon4.rada.gov.ua/laws/show/z023112/print144363521630 7875. – Data ostannioho dostupu 15.11.2015. – Nazva z ekranu.
14. Nacionaĺný bank Ukrajiny postanova N 368 vid 28.08.2001 pro zatverdžennia instrukciji pro poriadok rehuliuvannia dijaĺnosti bankiv v Ukrajini [Elektronný resurs]/ Nacionaĺný bank Ukrajiny . – Elektron. tekstovi dan. – Ukrajina, 2001. – Režym dostupu: http://zakon1.rada.gov.ua/laws/show/z0841-01/print142557 6451 253408. – Data ostannioho dostupu 15.11.2015. – Nazva z ekranu.
15. What are credit ratings? [Electronic resource] \ Standart and Poor`s ratings servi-ces. – Electronic text data. – USA, 2015. – Mode of access : http://www.spratings. com/en_ US/understanding-ratings. – Data ostannioho dostupu 15.11.2015. – Nazva z ekranu.
16. Hlosarij bankivśkoji terminolohiji [Elektronný resurs] / Nacionaĺný bank Ukraji-ny. – Elektron. tekstovi dan. – Kýiv: Nacionaĺný bank Ukrajiny, 2012 – Režym dostupu: http://www.bank.gov.ua/control/uk/publish/article?art_id=124734. – Data ostannioho dostupu 15.11.2015. – Nazva z ekranu.
17. Fitch pomestilo reytingi Praveks-banka v spisok rating watch negativnyy [Elektronnyy resurs] / Fitch reytings. – Elektron. tekstovyye dan. – SSHA, 2014. – Rezhim dostupa: https://www.fitchratings.com/site/fitch-home/pressrelease ?id=817 831. – Data poslednego dostupa 15.11.2015. – Nazvaniye s ekrana.
18. Fitch ponizilo reytingi ustoychivosti Privatbanka i Prokredit banka Ukraina, podtverdilo reyting KAB [Elektronnyy resurs] / Fitch reytings. –Elektron. tekstovyye dan. – SSHA, 2014. – Rezhim dostupa: https://www.fitchratin- gs.com/site/fitch-home/pressrelease?id=817831. – Data poslednego dostupa11. 2015. – Nazvaniye s ekrana.
19. Finansova zvitnisť [Elektronný resurs] / Pryvatbank. – Elektron.tekstovi dan. – Ukrajina, 2014. – Režym dostupu: https://privatbank.ua/about/finansovaja-otche tnost/#quarterly. – Zahol. z tytul. ekranu. – Vidomosti zibrani za 2014 rik.
20. Zvitnisť ta finansovi rezuĺtaty [Elektronný resurs]/ Kredi ahrikoĺ bank . – Elektr-on. tekstovi dan. – Ukrajina, 2014. – Režym dostupu: https://credit-agricole.ua/ about/accounting. – Data ostannioho dostupu 15.11.2015. – Nazva z ekranu. – Vidomosti zibrani za 2014 rik.
21. Finansova zvitnisť [Elektronný resurs] / Praveks-bank. – Elektron. tekstovi dan. – Ukrajina, 2014. – Režym dostupu: http://www.pravex.com/ukr/ about/ reports/state ment. – Data ostannioho dostupu 15.11.2015. – Nazva z ekranu. – Vidomosti zibrani za 2014 rik.
22. Zvitnisť [Elektronný resurs]/ Prokredyt bank . – Elektron. tekstovi dan. – Ukraji-na, 2014. – Režym dostupu: http://www.procreditbank.com.ua/about/otchet nost/. – Data ostannioho dostupu 15.11.2015. – Nazva z ekranu. – Vidomosti zibrani za 2014 rik.
23. Rejtynh-lyst [Elektronný resurs] / Ekspert-rejtynh. – Elektron. tekstovi dan. –Ukrajina: Kýiv, 2014. – Režym dostupu: http://www.expert-rating.com/rating-list _reiting-list/. – Data ostannioho dostupu 15.11.2015. – Nazva z ekranu.