On October 22, 2014, the National Bank of Ukraine hosted a regular meeting with the senior managers of the major Ukrainian banks. The meeting participants discussed the practical aspects of the operation of the banking sector in light of the tense political and economic situation Ukraine.

Governor of the National Bank of Ukraine Valeriia Gontareva informed representatives of the banking community about the outcome of negotiations with the International Monetary Fund (hereinafter – the IMF) and other international financial institutions. She also said that the cash foreign exchange market had shown signs of stabilization and pointed to a marked reduction in the deferred demand for foreign exchange from banks' clients.

In his turn, First Deputy Governor of the National Bank of Ukraine Oleksandr Pysaruk informed the attendees that the central bank would provide refinancing loans to systemically important banks in amounts necessary for them to meet their obligations to customers. "Support will be provided to solvent banks. The amount of emergency loans will be gradually reduced. The National Bank provides liquidity to banks rather than capital. The capitalisation of the bank falls within responsibility of managers and shareholders of a bank," said Oleksandr Pysaruk. He also noted that NBU experts, in cooperation IMF experts, develop eligibility criteria by which banks are classified as systemically important, which means that the capitalization requirements for such banks will be gradually raised over the next five years.

At the meeting, the senior managers of banks said that foreign exchange interventions carried out by the National Bank of Ukraine to replenish banks' cash departments had had a positive impact on the cash foreign exchange market. Banks have to cope with a large number of citizens willing to purchase foreign exchange, which complicates the operation of cash departments. In spite of these temporary difficulties, however, foreign exchange interventions conducted by the National Bank of Ukraine contributed to alleviating panic-driven sentiment among the population. The senior managers of banks believe that this has eased financial market tensions. According to the bankers, a gradual inflow of hryvnia deposits into the banking system can be attributed to the alleviation of financial market tensions. They also pointed to a marked decrease in the deferred demand for foreign exchange from business entities and requested the National Bank to continue carrying out foreign exchange interventions to meet the needs of banks' clients.

At the end of the meeting, Valeriia Gontareva unveiled NBU's plans to carry out a regular foreign exchange intervention to meet the needs of banks' clients. She also said discussions are underway with the IMF to rescind some restrictions imposed by NBU Board Resolution No. 591, dated September 22, 2014, "On Amendments to Some NBU Regulations".

"We maintain a constant dialogue with banks and are prepared to lift some foreign exchange restrictions that hinder economic activities. We expect the economic situation to stabilize. Thus, restrictions will be gradually rescinded," Valeriia Gontareva reassured the bankers.