Adaptive stability of banking system: theoretical aspect

The global financial crisis has raised a question of stability of both national banking system and separate credit organizations. In spite of numerous scientific research there is still no precise definition of the category “stability of the banking system”. A terminological review of existing definitions together with comparative analysis results on the concepts “soundness”, “stability”, “reliability”, and “balance” are provided. The author substantiates a necessity to introduce a new concept “adaptive stability of the banking system”. It will provide an opportunity for adaptation to dynamic environment without essential changes in principles of functioning. The goal of securing the banking system stability is defined. The purpose is to protect the functioning integrity of credit institutions by implementation of corrective actions. It was concluded that stability of the banking system represented by a set of credit institutions is determined by the degree of its constituent entities’ stability. Stability of the banks generally depends on the achievements reached by each entity of the banking community and the ability to adapt quickly to changing conditions. To be stable the banking community should also meet all standards of banking regulations.