Proceedings of the International scientific and practical conference ―Modern Research and Education‖ (May 2-4, 2026) / Publisher website: www.naukainfo.com. – Warsaw, Poland, 2026. - 523 p.

38 functioning of the country's financial system remains extremely important and relevant. Among the group of internal risks that affect the stability of the financial system and provoke its vulnerability is also the quality of budget execution at all levels, including the State Budget of Ukraine. The existence of a significant budget deficit leads to movement along a "debt spiral". State debt causes the formation of a budget deficit, since the state is not always able to reduce expenses in accordance with the income received, especially in times of war. And, the budget deficit caused by a reduction in budget revenues and an increase in expenses is one of the main factors of inflation. The growth of debts and the payment of interest on them may not lead to a solution to the debt problem, but rather to its growth, which will threaten the financial stability and security of the country. In our opinion, the existing methods of assessing the stability of the financial system are narrowly focused and focused mainly on the banking sector, studying indicators and conducting monitoring that characterize the financial market, others are focused on the established individual elements that form the basis of the financial system. At the same time, the financial system is a set of various subsystems: budgetary, tax, currency, payment, credit, banking, etc. These subsystems are closely interconnected and influence each other. Therefore, it is advisable to use an integral, generalizing indicator using factor analysis. That is, it is necessary to take into account all components that can affect the stability of the financial system, increase its vulnerability. The generalizing indicator must be justified, significant, objective, measurable, traceable, significant, systematic, so that its impact on specific generalizing, effective criteria can be assessed. It is necessary that institutions that collect and summarize macroeconomic criteria that characterize the stability of the country's financial system: the National Bank, the State Statistics Service, the Ministry of Economy, the Ministry of Finance of Ukraine, etc., take into account all indicators that characterize the integrity of the country's financial system.