Subject The difficult situation in our economy has an adverse impact on individual banks and the entire banking system. As the Russian banking system's stability depends primarily on sustainability of its individual elements, it is crucial to assess the financial sustainability of regional banking systems. Objectives The paper aims to study the existing indicators and develop new ones, and on their basis, devise a unique methodology enabling to assess financial soundness of regional banking system. Methods We employ the comparative method, tabular presentation, factor method, grouping, and factor analysis. Results The study defines a regional banking system, its elements, a regional bank and indicators characterizing its sustainability. We devised our own methodology to assess the financial soundness of the banking system by offering a number of indicators describing the financial stability of regional banking system, their point rating. We divided the regional banking systems into three groups, depending on their financial stability. The assessment may help identify and address problems of economic development of each particular region and optimize regional banks' performance. Conclusions The offered methodology enables to identify the category of financial stability of the regional banking system under analysis, and thereby to determine whether any measures are needed to strengthen its financial stability.
Keywords: financial stability, regional commercial bank, assessment, technique, banking system
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