THEORETICAL AND CATEGORICAL BASIS OF SHADOW BANKING IN EUROPE AND UKRAINE

Abstract

Traditionally, the control over the classical financial system is stricter, therefore as a result shadow financial institutions have greater advantages, because they are not subject to regulation and provide riskier and more profitable services. Shadow banking does not directly violate the established rules of financial monitoring, but carries the threat of excessive debt load, money laundering, unethical consumer lending with an unlimited interest rate. The purpose of this study is to define the concept of shadow banking and its components, to study the development and definition of shadow banking in European countries and Ukraine, as well as to highlight methods of possible regulation of shadow banking. System analysis methods were used to determine the concept and structure of the shadow banking system. Methods of observation and description were used to collect data on shadow banking in European countries and Ukraine and compare them, the method of synthesis was used to highlight the features of the shadow banking system of European countries and Ukraine during the crisis years. Based on the results of the study, the concept of shadow banking was defined as a system of shadow financial organizations that carry out financial intermediation outside the country's classical banking system. The main reason for the existence of shadow financial institutions in Europe is to ensure the income of enterprises for survival in crisis situations. The factors forming shadow banking in Ukraine were also determined: weak monitoring, money laundering, low standard of living and financial literacy of the population. It was concluded that the current approach of regulatory bodies to shadow banking involves fragmented monitoring and regulation, which leads to a lack of transparency. The main features of shadow banking in European countries are: cyclicality, relationship with classical banking, diversification of the level of shadowing depending on the EU state. The Ukrainian shadow financial system is characterized by opacity and money laundering, public distrust of classic financial institutions, cash culture and arbitration.