Home  Journals  Finance and Credit  23(359) – 2009 June

Methodological approach to defining the functional adequacy of the banking system in the transitional economy

Available online: 16 September 2009

Subject Heading: Banking system

JEL Classification: 

The article makes an attempt to define the essence and criteria of the functional adequacy of the banking system and define the degree of influence of various factors on it. As a criterion of functional adequacy of the banking system, its ability to ensure realization of basic tasks of the country’s development is considered, based on the effective transfer of savings into investments under coordinates “households – banks – real sector”. The author shows that, unlike developed market systems, in the economies undergoing transformation, the banking system adequacy is first and foremost defined by its ability to perform the transformation function. The article shows the mechanisms of transfer of micro-level dysfunctions to the higher system levels.

Keywords: banking system, functional adequacy, system approach, micro-dysfunction, transfer function, capital adequacy

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ISSN 2311-8709 (Online)
ISSN 2071-4688 (Print)

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