Abstract

The role of banking system in protecting of financial system from internal and external threats is defined; the requirements for banking system to ensure financial system stability are identified. The liaisons between banks and society are presented as agents’ liaisons amid agency theory; it’s conceptual and methodological apparatus. Different alternatives for reconciliation of banks’ commercial interests and socio-economic interests in ensuring financial stability are considered: development of required regulatory policy; incentives for banks to deal with threats within financial stability; development of specific qualities of banking system to facilitate financial system protection; extend influence of banks on financial stability. Institutional, legal and organization potential of banking system of Ukraine and institutional abilities of National Bank of Ukraine to maintain financial stability of state are analyzed.

Keywords: banking system, financial stability, agency dilemma, stable banking system, prices stability.
JEL Classification Codes: E52; E58