Concentration of the Ukrainian Banking Services Market:current State and Prospects

Abstract

Background. The banking services market is an integral element of the financial system of any country, and its efficient functioning is a prerequisite for the stable development of both the real sector and the national economy. Its role is especially relevant in the period of socio-economic and geopolitical fluctuations faced by the economic system, including the national one. The relevance of this study is determined by the need for the state competition authorities to resolve the dilemma of choosing between ensuring a high level of competition in the banking services market and stimulating the development of powerful Ukrainian banks that can survive in the competition and have sufficient financial capabilities to provide cheap credits to business entities in critically important industries for the economy, which are in difficult financial conditions. Methods. For the study the Ukrainian market of banking services, modern methods of economic research were used, in particular, comparative analysis ( in assessing the number of banks in Ukraine and other countries), system structural analysis (in appraising the current state of the Ukrainian market of banking services and determining the nature of concentration in this market), economic-mathematical and formalization method (in quantifying the degree of concentration of the banking services and presentation of the estimate). Results. The analysis of market concentration indicators showed a low level of banking services market concentration, which means that individual banking institutions do not have market power and cannot influence the conditions of market, and thus bank capital is dispersed among a large number of banks. As a result, domestic banks are characterized by lower financial stability than banks in developed countries. Conclusions. The state competition policy should take into account the importance of the banking services market and contain special legislative norms aimed at regulating competition and concentration in this market.