Аннотация
The purpose of this paper is to conduct research on the effectiveness of the banking market regulation and the development of some proposals in the field of forming a stable and efficient banking system capable of rationally managing capital flows. An analysis of the practice of prudential regulation of second-tier banks was conducted. Its weaknesses in terms of information disclosure are identified, which allows a formalized approach to meeting the requirements of the regulator. Underestimated risks that form a misconception of the regulator about the state of the banking sector were identified. It was proposed to conduct a parallel assessment of the credit risk’s level by the regulator, based on our own motivated judgment, and also as an indicator reflecting the negative impact of macroeconomic shocks, to use not only the capital of banks, but also the level of non-performing loans.