Development of budgeting mechanism of banks' financial activities in the conditions of international economic relations

The article examines the budgeting mechanism of banks’ financial activities in the context of international economic relations. The essence of financial planning of banking activity, as well as its role in the bank management system, is substantiated. The method of bank budgeting was considered. Recommendations for the implementation of modern automated information and analytical budgeting systems in the bank, used in foreign practice, are proposed. The proposed procedure for the formation of the bank’s financial plan, which will make it possible to improve the budgeting of the bank’s financial activities, since with the help of budgeting it is possible not only to increase the income and reduce the expenses of the bank, but also to obtain an increase in economic efficiency indicators by improving the quality of the services provided and the degree of satisfaction of customers and employees of the bank. Budgeting is a technology of business management at all levels through budgets, including setting goals, monitoring performance, analyzing and making appropriate adjustments. The processes of financial planning and budgeting are future-oriented decision-making. In the process of budgeting, managers make more reasonable management decisions based on budget information, and a system of responsibility distribution and motivation of bank branch managers and business line managers regarding the results of their work. Budgeting forces planning, producing a comprehensive financial model of the bank, clear for analysis, key parameters and improving coordination. Banks that effectively use budgeting get the opportunity to plan the needs for financial resources, thereby reducing the risks of unforeseen expenses, obtaining cost savings due to the coordination of all types of activities, and determine ways to eliminate problems and obstacles that arise in the process of activity. The process of drawing up the planned budget consists of four stages: 1) determination by the management of the main directions of the bank’s activity; 2) budget centers prepare their budgets; 3) conducting analysis and checking of budget proposals by the management, the result of which is the adjustment of their budgets by the budget centers in accordance with the recommendations of the management; 4) approval of budgets. The first stage includes the following four components: a) determination of guidelines for the bank’s activities in general; b) determination of planned values of macroeconomic indicators (analysis of the external environment); c) determination of guidelines for the principal areas of activity; d) determination of internal regulations, including those regarding non- operational activities.