Journal article Open Access

Content and Significance of Financial Monitoring over Activity of Institutions of Banking System of Ukraine

A.A. Telestakova, R.A. Mirzoian

The content and significance of financial monitoring as an important type of control activity of state authorities over the functioning of the banking system of Ukraine have been researched in the article. Based on the analysis of the provisions of the normative and legal acts of Ukraine, it has been indicated that the functions of mandatory financial monitoring in the banking system are put on the State Committee for Financial Monitoring of Ukraine (SCFM of Ukraine) and the National Commission on Securities and Stock Market, which take central place within the national counteraction system to money laundering and terrorist financing. The author has characterized the main methods of financial control over banking activities, which are carried out in the form of audits on the implementation of certain monetary and settlements operations, and the verification of the results of banking operations. In particular, the author has noted that the effective functioning of Ukrainian banks directly depends on the systematic implementation of state financial monitoring by the authorized state agencies in the area of counteraction to legalization (laundering) of proceeds from crime, within banking activities.

On the basis of the analysis of scientific concepts and practice of functioning of banking institutions, the main directions for improving legal principles for the organization of financial monitoring over the sphere of banking activity by the authorized state agencies are as follows: development and adoption of the Law of Ukraine “On State Financial Control (Monitoring) over Banking Activities”; strengthening of the banking system of Ukraine by updating the system of internal financial control in risk management, increasing its resilience to crises and threats; strengthening of confidence in the banking system by depositors and investors; deepening the integration of Ukraine’s banking system into the global financial space; ensuring the transparency of the functioning of the banking system; preventing and counteracting the legalization of proceeds from crime and terrorist financing.

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