Economic sciences/15. State regulation of economy

Candidate of Economic Sciences, Associate Professor, Department of Information Systems in Management Associate Professor, Gudzovata O. O.

Lviv Trade and Economic University, Ukraine

postgraduate, specialty «21.04.01 – Economic security of the state»

Vasyltsiv V. G.

National Institute for Strategic Studies, Ukraine

Disadvantages of institutional provision of monetary and credit sphere and directions for their elimination in order to ensure economic security of Ukraine

System changes to strengthen the financial security of the state take place in accordance with the tasks set out in the Association Agreement between Ukraine and the European Union, the Presidential Decree «On the Strategy of Sustainable Development «Ukraine-2020», and Government program documents. At the same time, in spite of the National Bank of Ukraine and the Government's use of anti-crisis measures to stabilize the monetary and credit sphere, the pre-crisis parameters of its development could not be restored. In the context of the latter, almost the most important is the modernization of the institutional and legal basis for the monetary and credit sector development as an element of the system of state financial security.

During the period of independence, a rather large number of strategies, concepts, programs, laws, regulations and other legal acts were adopted in Ukraine, however, inconsistency of government action leads to uncertainty and non-compliance with the provisions of the institutional and legal basis of monetary and financial security in Ukraine.

In particular, we are talking about such destructive parameters as: (1) monetary, fiscal and budgetary state policies exist almost independently from each other for today; (2) the National Bank of Ukraine efforts are mainly concentrated on balancing currency sphere imbalances, while not paying enough attention to other components of monetary and credit regulation; (3) there is an internal mismatch of monetary and credit instruments; (4) mid-term and long-term strategic planning and forecasting of monetary and credit sector development for this time stays undeveloped; (5) dispersal and duplication of functions, especially organizational, between several central authority executive institutions; (6) role of informal institutions predominance over formal in the process of making managerial decisions.

Modernization of the institutional and legal basis for the development of the monetary and credit sector requires improving the quality of long- and medium-term economic forecasting and planning to ensure the formation and implementation of economically feasible policies of Ukraine, given that excessively optimistic macroeconomic forecasts lead to systemic problems of economic development. This, in turn, requires the formation of an appropriate legislative framework which should be directed, in particular, on normative definition and settlement of such aspects as: the task of strategic forecasting and planning; subjects (state power apparatus, their subdivisions) of the planning process, their authority and the order of interaction; the list and requirements for the content of planning and forecasting documents, which are developed at the state and departmental levels, the procedure for their development, examination, coordination, approval, adjustment and periodicity of the review; measures on which the results of the monetary and credit sector development tasks for the previous period will be determined, the goals, threats and main directions of the state monetary and credit policy will be formulated and specified; the task of a comprehensive review of the monetary and credit sector, the order and timing of its conduct; the process of monitoring and regular assessment of the state and threats to monetary and credit security, independent documents examination in the provision of monetary and credit security field, and informing and presenting proposals for updating of planning documents in the field of monetary and credit security; the procedure for determining the volume of necessary financing of the monetary and credit sector and coordinating the process of planning its development with the budget planning process; the place of strategic forecasting and planning in the monetary and credit sphere in the national process of State Budget strategic planning and drafting; control over the implementation of strategic planning documents.

In order to improve the institutional and legal basis of monetary and credit sector development as an element of the financial security system of the Ukrainian economy it is necessary to improve the methodology for assessing the level of monetary and credit security, an important step in eliminating a methodological disadvantage is the inclusion of not only quantitative ones, but also qualitative characteristics of monetary and credit policy. It is about assessing the level of National Bank of Ukraine independence in the formation and implementation of monetary and credit policy, assessment of the level of openness and availability of information on the implementation of monetary policy, assessment of the level of accountability and responsibility of the National Bank of Ukraine in the implementation of monetary policy, assessment of the Government and National Bank of Ukraine actions coordination level, which will make it possible to form reliable information and analytical basis of the real state of national monetary and credit security, determine the extent of its risks and threats, and, therefore, to develop effective management decisions of state authorities on monetary and credit policy implementation.