29 December 2018
week the Financial Stability Council (FSC) held the final meeting in 2018. The
members at the meeting stated that renewal of cooperation with the
International Monetary Fund and funding granted by the IMF and other IFIs is of
utmost importance for maintaining macroeconomic stability during the period of
significant external debts repayment in 2019 and 2020.
notable external and internal challenges, this year ended on a positive note:
the GDP growth is expected to be 3.4% yoy, the Ukraine’s international reserves reached a
five-year high, hryvnia is stable, the budget deficit is close to a historical
minimum, and preconditions have been put in place for further deceleration of
The FSC noted the efforts of the Ministry of Finance
for implementing a prudent fiscal policy throughout the year, as well as joint
efforts for launching a new IMF Stand-By program.
the same time, the FSC members highlighted key challenges of 2019 such as deceleration
of global economy and Ukraine’s key partner economies, downward pressures on
raw materials prices, and policy rate increases by leading world banks.
Meanwhile, a significant decrease in oil prices will be a mitigating factor.
The economic growth in Ukraine will slow somewhat due to tight monetary and
fiscal policies that are necessary to ensure macroeconomic and financial
stability. Labor market imbalances is an additional risk. Ukraine also faces uncertainty
due to two upcoming elections.
also discussed NPLs of the state-owned banks. Finding s
solution to this problem is a priority for the FSC, the National Bank of
Ukraine (NBU), and the Ministry of Finance of Ukraine. The NBU is drafting a resolution
on NPL management – it will set standards and recommendations for banks on how
to manage problem borrowers.
general, the meeting considered a range of topics on the state-owned banks:
the guidelines for restructuring non-performing loans of the state-owned
banks were approved. The FSC expects that compliance with these principles will
safeguard the interests of the state as the banks’ owner
the issue of appointing independent supervisory boards at Oschadbank and Ukreximbank. The
Ministry of Finance is dedicated to a timely appointment of the supervisory
boards via a transparent competition
The issue of lending
by the state-owned banks to major state-owned companies was
discussed. The FSC decided that heavy lending by state banks to state
companies is an issue that needs a comprehensive solution, for that purpose
consultations are held with state banks, corporate
borrowers and IFIs.
FSC members also discussed economy de-shadowing and improving transparency of
the fiscal authorities after the split of the State Fiscal Service. Monitoring
transfer pricing, regulation of automated information exchange with the customs
authorities of the partnering states, and establishing double customs
authorities were in focus.
The FSC members welcomed the introduction of the new
system for submitting financial statements in the uniform XBRL format for big
companies starting next year. This will be beneficial both for companies due to
automation of drawing up and submitting reports and data users on the account
of advanced security and transparency.
The meeting was attended by Minister of Finance of
Ukraine (MoF) Oksana Markarova,
Governor of the National Bank of Ukraine (NBU) Yakiv Smolii, Head of the National Securities and Stock Market
Commission (NSSMC) Timur Khromaev,
Head of the National Commission for State Regulation of Financial Services
Markets (NCSRFS) Ihor Pashko,
First Deputy Governor of the NBU Kateryna Rozhkova, Deputy Governor of the NBU Serhii
Kholod, Deputy Ministers of Finance Yuriy Heletiy and Vasyl Shkurakov, and Deputy
Managing Director of the Deposit Guarantee Fund (DGF) Andrii
The Financial Stability Council was established
by a presidential decree in March 2015. The FSC is comprised
of the Governor of the National Bank of Ukraine, the Minister of Finance of
Ukraine (co-chairs of the FSC), the Head of the National Securities and Stock
Market Commission, the Head of the National Commission for State Regulation of
Financial Services Markets, the Managing Director of the Deposit Guarantee
Fund, a Deputy Governor of the National Bank of Ukraine, and a Deputy Minister
of Finance of Ukraine.
The FSC provides a forum for professional discussion of systemic risk
posing a threat to the country’s financial stability. The next meeting is scheduled for February 2019.