Preconditions, the current state and prospects of innovation in Ukrainian financial system

Abstract

Abstract: The article is dedicated to the analysis of the prerequisites and the current state of Ukrainian financial system, as well as the prospect of innovative financial instruments. The study aims to outline the perspective directions for the development of the Ukrainian financial system using innovative financial tools and technologies during a state of war and a challenging financial situation especially as it relates to high dependency on foreign financial support. The methods used in the study are: methods general and specific, epistemological methods, induction and deduction in generalizing the foundations for the formation and development of the Ukrainian financial system. Results: The article systematizes the direct precondition that shaped the current state of the financial system of Ukraine, reviews innovative financial instruments currently in use and those with significant potential that can be introduced or whose use should be expanded. Suggested specific perspective financial tools according to the set goals and current Ukrainian context. Conclusions: In the context of war, the introduction of innovative financial instruments is critical to ensuring the functioning of the financial system of Ukraine, as such tools provide efficiency and transparency, which is vitally important given the high dependence on external financial resources. Further implementation of existing and new financial instruments is strategically important both during wartime and in post-war recovery conditions, amid a significant external public debt burden. Debt-for-environment swaps are discussed as one of high prospect financial tools that would both allow Ukraine to reduce in foreign debt and hit sustainable development goals. Keywords: budget, innovative development, innovative financial instruments, sustainable development, economic development, financial stability, technology.