Speaking at a roundtable discussion on “Credible capacity of the Deposit Guarantee Fund to fulfill its commitments” that was held on September 22, 2014, First Deputy Governor of the National Bank of Ukraine Oleksandr Pysaruk said that the capacity of the Deposit Guarantee Fund (hereinafter – the Fund) to fulfill its mandate is beyond any doubt.

“What is at issue here is not a lack of funding available to the Fund. The Fund has sufficient funds to fulfill its mandate," Mr Oleksandr Pysaruk said, adding that, if required, public funds allocated in the State budget and loans provided by the National Bank of Ukraine could be used to finance the Fund.  

Oleksandr Pysaruk also noted that, according to estimates by the National Bank of Ukraine, in 2015, the burden of paying out the guaranteed compensation to depositors borne by the Fund would be far less heavy than in 2014. In addition, the National Bank of Ukraine expects the deposit outflow from the banking system to subside in the near future.

 “We do not observe any systemic banking crisis. There are some problems, largely related to the developments in the east of Ukraine, but they are not systemic in nature," said First Deputy Governor of the National Bank of Ukraine.

Oleksandr Pysaruk emphasized that the central bank would remove from the market  only insolvent banks and banks that engage in transactions to convert non-cash funds into cash to such an extent that they fall under suspicion of carrying out these transactions for illicit purposes. According to him, no systemically important bank will be removed from the market until the end of this year. “We are aware that declaring a bank insolvent and putting it into the hands of the Fund is a measure of last resort. We tend to engage with shareholders and persuade them to capitalize banks. A majority of bank owners are aware of their responsibility and are involved in efforts to find funding sources needed for capitalization," he said.

First Deputy Governor of the National Bank explained that the banking system is still facing a lot of problems, piled up in the past. These problems should be addressed on a scheduled basis, as is the case now.

Oleksandr Pysaruk noted: “The National Bank of Ukraine intends to purge the banking system. However, it will be done in a gradual manner." To this end, the National Bank of Ukraine is currently working on ensuring that banks have a more transparent ownership structure, taking action to ensure that the banking system is sufficiently capitalized,  devising mechanisms to place greater responsibility on banks' senior managers, including responsibility for distorting financial statements, closely monitoring transactions that pose a high risk to the soundness of a bank, enhancing coordination and prompt information exchange between the regulator and the Fund, etc.

Oleksandr Pysaryk believes that next year the banks' contributions to the Fund should be raised and the system of differentiated contributions should be improved. 

In his turn, Managing Director of the Fund Vasyl Pasichnyk assured those present of the readiness of the Fund to fulfill its mandate and the availability of required financial resources: “As of today, the Fund has more than UAH 6.5 billion at its disposal. We have received considerable financial support from the National Bank of Ukraine and the Ministry of Finance of Ukraine. Therefore, the Fund has sufficient funds to pay compensations this year".