The Impact of Hostilities on the Banking System, the Financial Sector, and Prospects for Recovering in a Conflict-Related Context

Abstract

Throughout the conflict in Ukraine, a multitude of adverse ramifications stemming from hostilities were observed within the sphere of banking activities and the overarching financial system. Such consequences encompassed disruptions in the operational continuity of banking branches, leading to closures attributable to the destruction of infrastructure and shelling incidents. The primary objective of this article is to undertake a comprehensive analysis of the repercussions of hostilities on the banking system, the financial sector, and the ensuing prospects for recovery within the context of the conflict. The methodology employed in this study is grounded in a structural analysis of key performance indicators of banks and economic standards pertinent to the banking system. The temporal scope of the analysis encompasses the years 2016-2023. The findings underscore the significance of systemic and sustained reforms directed towards upholding financial stability and macroeconomic equilibrium, with a specific focus on the pivotal role played by the financial sector and banks. The pragmatic significance of this study lies in the identification of essential tools pivotal for preserving the financial stability of the financial sector during periods of war.