Functioning of the banking system

Background of the study. The key to efficient operation and sustainable development of economy of any country or regional association is its stable and sound banking system. The main task of the banking system is to maintain economic growth through the reinforcement of economic resources, credit, transfer funds in those sectors where shortages. These are the problems in this solves the banking system of Ukraine in terms of the strategic orientation of the country's accession to European structures. The banking system of the country or regional association depends on the stability of banking institutions and their ability to resist the negative influence of various factors: macro-economic, informational, organizational, regulatory, etc., which cause the appearance of various banking risks. That is, only the awareness of the risks surrounding the banking business, committed management can ensure the functional reliability of banking institutions. The reliability of banking institutions is particularly important for countries that have recently entered the market mechanisms of the national economy. Banking system of Ukraine has yet to gain personal experience of the limitations of factors that can lead to a violation of its internal stability. Thus, the adaptation of methods and models of banking risk management can be considered as one of the foundations to create their own domestic approaches to ensure long term reliability as commercial banks in Ukraine and the country's banking system as a whole. The most common operation is to provide commercial banks lending and credit policies. Lending operations provide the bulk of commercial bank income. However, analysis of the situation in the banking sector, shows that some banks are in financial ruin due to the extremely risky credit policy. In this context, the relevance of the problem becomes to minimize the risks of credit activity of commercial banks. Banks need to manage credit risk in such a way as to obtain maximum profit, while seeking to minimize the risk that is directly related to the mechanism of granting and repayment of bank loans. Studies of domestic and foreign scholars on risk in banking activities are reflected in the works of Yu bottle, NI Versailles, V. Vitlinskogo, V. Galasyuk, AP Kovalev, N. C Pavlyuk, A. Pernarivskogo, AG Savchenko, I. Horuzhy and others in which it is focused on credit risk, the problems of their assessment and management. The study aims to deepen the theoretical and practical knowledge on bank management: credit risk management in banks for later use them in the performance of specific practical problems, the promotion of the search of modern scientific achievements in credit risk management to minimize them. Category: TECHNICAL ISSUES OF LABOR