Determinants of theStabilization of Banking Operations withDerivative FinancialInstruments on theFinancial Market

Abstract

The article examines complex and adequate measures that ensure the stability of
banking institutions during operations with PFIs, taking into account the specifics of
derivative contracts. Reasonable directions for the regulation of banking operations with
derivative financial instruments (DFIs) on the financial market through the alignment of
recommendations on financial stress indices (FSI) and the introduction of a new indicator
"the ratio of CDS purchased to gross loans" of commercial banks with the aim of setting
a threshold value for it at units or 100%. The proposed indicator creates conditions for
a preventive effect on credit and systemic risks that arise when conducting banking
operations with DFIs. Approaches to assessing the financial stability of banking institutions
are presented and the functional potential of derivative financial instruments at the microand macro-level is revealed. The macroprudential instruments of the over-the-counter DFI
market, which mitigate credit risks when carrying out operations with derivatives, are singled
out. The structure of possible limits for limiting risks in banking operations with DFIs was
determined and indicative assessment indicators were grouped based on their internal
limits.