On December 25, 2014, the National Bank of Ukraine has issued NBU Board Resolution No 863 “On Approval of the Procedure for determination of systemically important banks” (hereinafter - Resolution No 863) adopting the methodology for determining systemically important banks.
According to Resolution No 863, as of 01.12.2014, the following 8 banks are designated as systemically important: Privatbank PJSC, Oschadbank JSC, Ukreximbank JSC, Delta Bank JSC, Raiffeisen Bank Aval JSC, Ukrsotsbank PJSC, Prominvestbank PJSC, Sberbank of Russia JSC.
Systemically important banks will be designated annually using multivariable mathematical model based on the systemic importance criteria. The main systemic importance criteria are total volume of assets, liabilities of legal entities and individuals, interconnectedness (volume of interbank lending) and the volume of lending to key sectors of the economy.
Systemic importance of a bank does not imply an obligation for the state to participate in capitalization of those banks. Decision on state participation in capitalization of banks is taken by the Expert Council on State Participation in the Authorized Capital of Ukrainian Banks at the Ministry of Finance of Ukraine.
Resolution on the Procedure for Determination of Systemically Important Banks (hereinafter - Resolution) is developed to meet the requirements of Law of Ukraine On Amendments to Some Laws of Ukraine Aimed at Prevention of Adverse Impact on Banking System Stability No. 1586-VII of 04.07.2014 entitling the National Bank of Ukraine to determine systemically important banks and peculiarities of their regulation and supervision.
The Resolution is aimed to set the methodology for determination of systemically important banks that affect the banking system stability.
The regulation was developed considering the relevant guidelines of the Financial Stability Board and the Basel Committee on Banking Supervision providing for importance of identifying systemically important banks, use of specific regulation of their activities, in terms of higher capital requirements in order to reduce systemic risk.
In the near future the National Bank of Ukraine will develop the regulations on supervision of systemically important banks setting, among others, additional capital requirements for them. The National Bank of Ukraine plans to gradually introduce new regulatory requirements for systemically important banks to allow their shareholders to take necessary measures. This will contribute to the soundness of those banks and banking system in general.
Resolution No. 863 comes into force on January 01, 2015.