Harmonization of Conceptual Approaches to the Interpretation of the Concepts of "Banking Control" and "Banking Supervision"

Abstract

The current state of development of the domestic banking system is characterized by rapid trends towards international standards. The global changes that are taking place in the financial market require banks to revise existing strategies related to banking risk management, in particular, improve approaches to their assessment, establish more stringent rules and requirements for banks' capital. In banking practice, control is considered as one of the main means to achieve economic stability. As you know, the banking sector, like any other sphere of life, is prone to crises, the consequences of which for the economy are always very unfavorable, since the banking sector acts as a connecting element between various economic agents that store their funds in banks and make payments and settlements through them. The collapse of one bank can provoke a domino effect, in which a chain of other banks has financial problems. In order to avoid this domino effect, the norms of banking control over the stability of individual credit institutions and banking supervision of their activities are being developed. However, despite the fact that the criteria for distinguishing between these concepts are widely covered in the scientific literature, there is no systematization of them. Therefore, the purpose of this study is to systematize scientific and methodological approaches to the interpretation of the concepts of "banking control" and "banking supervision" and to determine their generalizing and distinctive characteristics. The views of domestic scientists and their attitude to the need for banking supervision and banking control have been assessed. As a result of the study, criteria were identified that take into account the specifics of their manifestations and allow us to assert that “banking supervision” is aimed at observing the rule of law by detecting, preventing offenses and eliminating their consequences, and “banking control” is aimed at maintaining discipline and law and order by systematic verification of the implementation of normative acts by commercial banks. According to the results of the study of theoretical approaches to the definition of the concepts of "banking control" and "banking supervision", the correlation between the goals, object, subjects and methods of banking supervision and banking control is substantiated.