ANALYSIS AND ASSESSMENT OF THE CURRENT STATE OF FINANCIAL SECU-RITY INDICATORS

Norwegian Journal of development of the International Science No 168/2025 31 ANALYSIS AND ASSESSMENT OF THE CURRENT STATE OF FINANCIAL SECURITY INDICATORS Mustafayev A. Doctor of Cooperative University, Baku, Azerbaijan https://orcid.org/0009-0007-3785-6864 https://doi.org/10.5281/zenodo.17608956 Abstract The article identifies the need to create a new system of indicators for national financial security. To prevent financial risks, it is proposed to calculate financial security indicators based on microeconomic indicators. Parameters for national financial security are defined to effectively analyze the state of security in the financial sector. It is concluded that financial security indicators should be grouped according to the sphere of activity and the entities involved in financial security. Keywords: indicator, financial security, functions, external threats, inflation, macroeconomic and microeconomic indicators, shadow fund, stability, balance. In accordance with the concept and strategy of the economic security of the Republic of Azerbaijan, the state of the country's economy must meet certain quality criteria and thresholds that ensure acceptable living conditions, the stability of the socio-economic situation, the military-political stability of society, the integrity and ability of the state, and the ability to resist the impact of internal and external threats [8]. The criterion of economic security is an assessment of the state of the economy in terms of the most important processes that reflect the essence of economic security. The assessment of security based on the criteria includes the assessment of the following: - resource potential; - the level of resource efficiency; - economic competitiveness; - territorial integrity and economic space; - independence and the ability to resist external threats; - the idea of sustainable development, which consists in achieving a balance between social stability and factors preventing social conflict, the needs and capabilities of society. The security of the financial system has a significant impact on the country's economy. Financial security is a mechanism of economic relations that creates high-quality conditions and the necessary financial resources for expanded reproduction, increased entrepreneurial activity and solvency of the population, maintaining balance and integrity of the state financial system, effectively combating internal and external threats to the state in the financial sector. However, such a definition does not fully explain the structure and list of indicators that comprehensively characterize the current state of the country's financial security. Financial security indicators should characterize the dynamics of economic systems. Not only the indicators themselves are important to ensure financial security, but also their threshold values. When we say these threshold values, we mean such levels of thresholds that their failure to meet them prevents the sustainability of expanded reproduction and ultimately leads to the emergence of negative trends in the socio-economic sphere. As a result of deviation from these threshold values, the national economy loses its ability to develop dynamically, loses its competitiveness in foreign and domestic markets and becomes a target for the expansion of monopolies. A critical condition for ensuring economic security is monitoring the dynamics of economic security indicators based on the analysis of specific quantitative values of these indicators, exceeding which poses a threat to the economic security of the state. The activity of the state financial security structure ensures the budget, tax, monetary and credit, investment, insurance, customs, currency, debt policy. The formation of a system of indicators occurs at the legislative level of the state. Financial security indicators are structural elements that reflect the process itself or the state of the analyzed object, as well as its quantitative and qualitative characteristics. Financial security indicators perform the following main functions: - forecasting events that may occur in the near future; - analysis of the situation and possible warning of unforeseen circumstances; - analysis of the security situation in the financial sector of individual objects; - operational implementation of various adjustments in the process of development of the financial sector by state administration. The system of indicators, fulfilling its functions, is the main tool for diagnosing the state of the country's financial system. The values of financial security are developed for each specific country on the basis of macroeconomic indicators reflecting its fundamental national interests. Analysis of the state of security in the financial sector should be carried out using indicators determined in the economic strategy of each specific state, taking into account the following parameters: - stability of financial flows at all levels of the financial system; - fulfillment of tax obligations (debt); - level of cash and non-cash payments in the payment system; - speed and value of the money supply; - volume of reserves (their size, ratio to GDP and state debt); 32 Norwegian Journal of development of the International Science No 168/2025 - GDP (its change over 5-10 years and per capita); - trade (trade balance, exports, imports). It should be noted that in order to determine the presence of threats to the financial security of the state, it is necessary to determine the acceptable threshold for indicators. The threshold is understood as a numerical measure, non-compliance with which will lead to a decrease in the efficiency of economic processes and the formation of negative situations in the country's financial system. However, approaching the thresholds of financial security is a factor confirming the increase in negative trends in this area. The fact that indicators exceed the permissible limits indicates a threat to the state financial confirms the fact of violations in the functioning of the financial system. Financial security indicators should be combined into the following groups depending on the field of activity: - investment, -money and credit, - budget, - tax, - insurance, - currency, - social. Financial security should be assessed using indicators characterizing the results of the activities of the following financial security entities: - state bodies, - enterprises, - households, - population. The assessment of security indicators in the financial sector of the Republic of Azerbaijan is characterized by the following indicators: - inflation rate, - level of monetization of the economic environment, - average annual growth rate of GDP, - profitability of the economic sector in the regions, - changes in structural elements, - volume of demand for money circulation, - supply in the economic environment. The financial security indicators we have mentioned indicate the conditions for the functioning and efficiency of the state's economic environment. Analyzing the above indicators of the country's financial security, we can identify external threats that may affect the security of Azerbaijan in the financial sphere. The main threats may include: - increased competition between countries in the financial sector, as well as in other areas; - active growth in the capitalization of financial assets; - dependence of the Azerbaijani economy on foreign investments; - globalization. Along with external conditions that may lead to a crisis in the Azerbaijani economy, there are also internal indicators that significantly affect the country's financial security. Let's give one of the internal indicators: - activity of the shadow fund; - weakening of the regulatory function of the financial system in the field of budget formation and execution at all levels; - increase in inflation. In ensuring the financial security of the state, special importance is attached to priority areas for reducing the level of inflation, the consumer price index, and increasing the solvency of the population. These priority areas should be determined by the state mechanism that ensures the effective functioning of the state financial system at the legislative level. The state mechanism for ensuring the financial security of the state is a functional complex of state bodies and institutions that create conditions for the stable functioning and balanced development of the state financial system, as well as for predicting, detecting, preventing and combating threats to it. This mechanism includes the following components: - legislation - a set of regulatory and legal acts in the field of preventing external and internal threats to financial security; - institutional - a system of state authorities and management bodies ensuring the financial security of the state; - Methodological - a set of tools and methods for ensuring financial security. Detailed regulation of the state mechanism is the main condition for the stable and balanced functioning of the state financial system and the high quality of the existing regulatory and legal framework. The system for determining the state financial security indicators should be integrated into the state mechanism as a prerequisite for ensuring the financial security of the country and should operate on the basis of the following principles: - legality (indicators should be calculated only in accordance with the current legislation); - reliability (all components of the indicator system should be based on a single methodological base); - consistency (indicators should be calculated in stages, taking into account priorities); - stability and reliability. Summing up the analysis of the financial security indicators of Azerbaijan, it can be concluded that there are deviations from the threshold values of a number of indicators. To improve financial security, attention should be paid to improving both economic and social indicators and at the same time adjusting these indicators to the appropriate threshold values. In order to create a functioning economic structure that meets the requirements of the market, the government should determine its priorities in all areas, including at all levels of society and the economy. Thus, in modern times, ensuring the financial security of the state is the most important direction for stabilizing economic processes. However, in order to ensure financial security in the country at a time when the threat of new conditions emerging in the world is increasing, it is necessary to develop a new system of indicators of state financial security. The new system of Norwegian Journal of development of the International Science No 168/2025 33 indicators of state financial security should be calculated not only on the basis of macroeconomic indicators, but also on the basis of microeconomic indicators. 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