Determinants of theStabilization of Banking Operations withDerivative FinancialInstruments on theFinancial Market

The article examines complex and adequate measures that ensure the stability ofbanking institutions during operations with PFIs, taking into account the specifics ofderivative contracts. Reasonable directions for the regulation of banking operations withderivative financial instruments (DFIs) on the financial market through the alignment ofrecommendations on financial stress indices (FSI) and the introduction of a new indicator"the ratio of CDS purchased to gross loans" of commercial banks with the aim of settinga threshold value for it at units or 100%. The proposed indicator creates conditions fora preventive effect on credit and systemic risks that arise when conducting bankingoperations with DFIs. Approaches to assessing the financial stability of banking institutionsare presented and the functional potential of derivative financial instruments at the microand macro-level is revealed. The macroprudential instruments of the over-the-counter DFImarket, which mitigate credit risks when carrying out operations with derivatives, are singledout. The structure of possible limits for limiting risks in banking operations with DFIs wasdetermined and indicative assessment indicators were grouped based on their internallimits.

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Publication Details

Journal
UCJC Business and Society Review (formerly known as Universia Business Review)
Published
2025-10-01
DOI
https://doi.org/10.57087/1khr3z97
Primary Topic
Banking stability, regulation, efficiency
Type
article
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article

Determinants of theStabilization of Banking Operations withDerivative FinancialInstruments on theFinancial Market

Oksana Oliinyk, Олександр Михайлович Петрук, Оксана Сергіївна Новак, Анастасія Олександрівна Петрук
UCJC Business and Society Review (formerly known as Universia Business Review)
Banking stability, regulation, efficiency
article

Determinants of theStabilization of Banking Operations withDerivative FinancialInstruments on theFinancial Market

Oksana Oliinyk, Олександр Михайлович Петрук, Оксана Сергіївна Новак, Анастасія Олександрівна Петрук
article en

Abstract

The article examines complex and adequate measures that ensure the stability ofbanking institutions during operations with PFIs, taking into account the specifics ofderivative contracts. Reasonable directions for the regulation of banking operations withderivative financial instruments (DFIs) on the financial market through the alignment ofrecommendations on financial stress indices (FSI) and the introduction of a new indicator"the ratio of CDS purchased to gross loans" of commercial banks with the aim of settinga threshold value for it at units or 100%. The proposed indicator creates conditions fora preventive effect on credit and systemic risks that arise when conducting bankingoperations with DFIs. Approaches to assessing the financial stability of banking institutionsare presented and the functional potential of derivative financial instruments at the microand macro-level is revealed. The macroprudential instruments of the over-the-counter DFImarket, which mitigate credit risks when carrying out operations with derivatives, are singledout. The structure of possible limits for limiting risks in banking operations with DFIs wasdetermined and indicative assessment indicators were grouped based on their internallimits.

UCJC Business and Society Review (formerly known as Universia Business Review)Vol. 22(86)
Zhytomyr Polytechnic State University (UA)
Openalex Percentile: Top 64%
Banking stability, regulation, efficiency
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