CONDUCTING FINANCIAL AND ECONOMIC EXAMINATIONS RELATED TO BANK FAILURE

Abstract

According to experience of the banking system existence of Ukraine it is obvious that every year an increasing number of banks are negatively affected by the financial crisis, which is the result of a wave of liquidation and bankruptcy of banking institutions.

Recently, a large number of requests have been sent to forensic institutions for conducting forensic economic examinations on the issues of a comprehensive analysis of the financial and economic activities of banks as well as on establishing features of concealing bankruptcy, fictitious bankruptcy or leading to bankruptcy. This is primarily due to the need to establish the possibility or impossibility of paying off monetary obligations including on deposits in the bank; analysis of the impact of certain management policies on the financial condition of banks; search for directions for optimizing costs and income of banks etc.

While performing a forensic examination on concealing bankruptcy, fictitious bankruptcy or bringing bankruptcy within the scope of his competence, a forensic

 expert shall give an opinion on the presence or absence at the enterprise of economic signs of fictitious bankruptcy, leading to bankruptcy or concealment of bankruptcy on the basis of the criteria defined in Guidelines No. 14. The calculation of these indicators for a bank is impossible due to the fact that there are differences in the determination of insolvency of the bank and the business entity due to the economic and legal nature of banks and the procedural steps for determining such insolvency.

Currently, there is no legislatively approved methodology for determining the economic signs of bankruptcy, fictitious bankruptcy, hidden bankruptcy specifically for banks, which makes it impossible to calculate such financial and economic indicators of the bank as bankruptcy, fictitious bankruptcy, hidden bankruptcy.