ASSESSMENT OF BANKING RISK AND WAYS OF THEIR MINIMIZATION

Abstract

In the conditions of a modern economy that is developing under the influence of military events, the issue of the stability of the banking system is becoming particularly relevant. The Ukrainian banking sector found itself faced with the need to adapt to new risks caused by economic instability, military threats and changes in the behavior of financial market participants. The article analyzes the impact of the war on the banking system of Ukraine, identifies the main risks that arose as a result of the transformation of the economic and social environment, and outlines the directions for their minimization. The article examines the nature of general banking risks, the features of their manifestation in modern conditions of economic instability, and also identifies ways to minimize banking risks. Particular attention is paid to the transformation of traditional banking risks under the influence of destabilizing external factors, in particular economic and political crises, as well as an analysis of new threats that arise in the activities of banking institutions. The study examines the possibilities of improving existing organizational risk management systems in order to increase the resilience of banks and strengthen financial stability. This approach contributes to the formation of an effective model of risk response in conditions of growing economic and political uncertainty. The scientific article provides a comprehensive assessment of the state of the banking system of Ukraine in wartime conditions and identifies key types of risks that affect its financial stability. The main risks include macroeconomic, credit, currency, capital, liquidity and profitability risks. An analysis of the dynamics of risks in 2024–2025 showed a general trend towards their gradual decrease, which indicates the strengthening of the financial stability of the banking sector. At the same time, the highest remains the macroeconomic risk caused by inflationary processes, exchange rate instability and the prolonged impact of military factors. The paper outlines the main threats to the banking sector, including an increase in the share of problem loans, currency market fluctuations, cybersecurity risks, capital outflow and a decrease in confidence in the financial system. Directions for improving the risk management system are proposed, in particular, the introduction of stress testing, asset diversification, the formation of sufficient reserves, the use of hedging instruments, and strengthening internal control and compliance.