National Bank of Ukraine (the NBU) has published the latest annual report on the
activities of the Financial Stability Board (the
Board). The report covers the period from June 2017 to July 2018.
In the course of its meetings over this period, the Board stressed on
multiple occasions that a key threat to financial stability is, currently, a
delay in resuming cooperation with the IMF. Implementation of structural
reforms that are envisaged by the program of cooperation with the IMF is of
great significance for ensuring macrofinancial
stability and access to financing from other international donors.
Furthermore, the Board’s meetings over this
period included the discussion of ways to strengthen
cooperation between the government and the NBU aimed at ensuring price
stability and sound fiscal policy, which is an important prerequisite for
preserving financial stability in the long run. The Board focused on the most
problematic issues of coordination of policies between the Ministry of Finance
and the NBU, primarily regarding the improvement of forecasting of dynamics of
STA balances. A related issue of the implementation of full-scale mid-term
budget planning at central and local levels
was also a part of the discussion.
In addition, a consensus on the further strategy of state-owned banks
was reached; possible ways of settling the issue of non-performing loans on the
balance sheets of state-owned banks were considered; the concept and the
financial model of development of the capital markets infrastructure were
approved; special attention was given to the
issue of legal regulation of cryptocurrencies in
Ukraine; the roadmap of actions to regulate insolvency, as proposed by DGF, was
In order to maintain the speed of reforms that started in 2014–2015, the
Board has repeatedly called on relevant public authorities for support and
approval of the necessary legislation. In particular, it was about the new
currency laws, documents aimed at strengthening the protection of creditors’
rights and resumption of lending, and implementation of mid-term budget
planning to strengthen the sustainability of public finances.
For reference: The Financial Stability Board was established by a Presidential
Decree in March 2015. The Board comprises the Governor of the National Bank of
Ukraine, the Minister of Finance of Ukraine (co-chairs of the Board), Head of
the National Securities and Stock Market Commission, Head of the National
Financial Services Commission, Managing Director of the Deposit Guarantee Fund,
First Deputy Governor of the National Bank of Ukraine, and Deputy Minister of
Finance of Ukraine. The Board provides a forum for professional discussion of
risks posing a threat to the country’s financial stability. The Board has held
two meetings in 2018. The next meeting is scheduled for October 2018.