Foreign capital in the banking sector of the economy: an institutional characteristic

The financial security of the state presupposes stability and sustainability of the banking system development. The attraction of foreign investment in this sphere along with positive results should increase its dependence on the negative impact of environmental factors. The article examines the quantitative and qualitative changes taking place in the banking system in relation to the foreign banks’ activities. The paper identifies the main trends in dynamics of indicators that characterize the place and role of foreign banks in the global banking system as a whole and with regard to groups of countries. It defines the features of the processes and factors that contribute to the revitalization of foreign banks. An in-depth analysis of the impact of globalization on institutional changes in the banking sector is conducted on the sample data of China and Russia belonging to the states with emerging markets. A common approach to solving the problem of opening the door to foreign banks involves restrictive measures employed by the monetary authorities of both countries in order to regulate their activities. These measures focus on maintaining the balance of the banking system, its ability to withstand external shocks. However, the nature and extent of government intervention vary significantly; their specific features are one of the factors explaining the difference in the role and place of foreign banks in the financial system of both countries. The research materials can be used when estimating the institutional aspect of the banking system development, the level of financial security and the factors of its formation.