PRUDENTIAL REGULATION OF BANKING ACTIVITIES IN THE EUROPEAN UNION

Abstract

Purpose. The purpose of the article is to analyze prudential regulation of banking activity in theEuropean Union and to provide proposals for improving prudential regulation in Ukraine.Methodology. The methodological basis of the research is the dialectical method, which allows youto investigate the set of phenomena in the relationship; a comparative method that allows you tosave the studied phenomena; the method of studying international practice, as well as the methodsof analysis, synthesis, deduction, induction, historical-legal method and formal-legal method. Results. The first section of the article analyzes categorically – the conceptual apparatus ofprudential regulation of banking activity as a type of banking regulation in particular, as well asthe place of prudential regulation of banking activity and its significance for the financial systemof Ukraine.The second section of the article is devoted to the study of prudential regulation of banking activityin individual member states of the European Union (France, Federal Republic of Germany).The third section of the article is devoted to the study of practical problems that arise in theimplementation of prudential regulation and prudential supervision and the provision of proposalsfor improving banking regulation in Ukraine.Conclusions. Prudential regulation of banking activity is an important component for thedevelopment and maintenance of the stability of the banking sector. The successful functioningof the market economy of Ukraine, like that of other countries, is connected with the efficiency ofthe functioning of the market of banking services, in particular credit institutions. Conducting ananalysis of prudential regulation is particularly relevant, because this topic has not yet receivedproper development in the scientific works of scientists and is only beginning to gain practicalsignificance. This study makes it possible to draw a number of basic conclusions about the legaland economic nature of prudential regulation and its main element – prudential supervision, tostudy the legal position of the subjects of this activity, to analyze the problems of the developmentand use of this system, as well as the experience of foreign countries in solving them. Prudentialsupervision ensures transparency and transparency of banking activities and is aimed atpreventing potential negative phenomena in the banking sector as a whole and, in particular,stopping excessively risky or illegal activities in specific banks, which can lead to the bankruptcyof a credit organization, and sometimes to systemic banking or even economic crises. It can beconcluded that effective prudential supervision is an integral part of the system of prudentialregulation of banking activity and is of crucial importance for maintaining the stability of thebanking sector, which is confirmed during the analysis of systemic banking crises.