Subject The article considers the economic substance of the local bank institution, and its role in ensuring the security of the banking system. Objectives The purpose is to substantiate the role of regional banks in ensuring the security of the banking system and to identify measures to improve their viability under growing financial turbulence. Methods The study draws upon various economic approaches to the interpretation of the concepts of banking system’s security and regional (local) bank, and the analysis of existing regulatory requirements in the banking sector, using general scientific methods and techniques. Results We specified the banking system’s security concept, and considered a set of internal and external factors influencing the security. The study identified problems of regional banks’ development, and their role in ensuring the security of the banking system. Measures to improve the viability of regional banks include, inter alia, the need to differentiate regulatory requirements, particularly those handling the issues of capitalization, organizational structure, and technological equipment of banks. Conclusions Increasing the viability of regional banks under growing political and financial instability is essential for the safety of the banking system and the financial sector as a whole. Embedding local banks into the Russian banking system’s ideology will enable to create an efficient regional subsystem of banking security.
Keywords: commercial bank, local bank, security, banking system, regulatory requirements
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