The National Bank of Ukraine has hosted a regular meeting with CEOs of the largest Ukrainian banks.

During the meeting the participants exchanged views on current monetary policy issues, the effectiveness of the existing exchange rate-setting mechanism and the importance of a search for a new equilibrium exchange rate.

The meeting participants concurred on the view that a relatively stable market should operate under a single exchange rate regime. "We advocate a transparent exchange-rate policy and a shift to market-based exchange rate-setting mechanisms. We want the market to operate under a single and efficient exchange rate regime. The regulator's commitment to a flexible exchange rate regime lies at the core of the monetary policy," noted Governor of the National Bank of Ukraine Valeriia Gontareva.

At the same time, she emphasized that the regulator does not relinquish the possibility of using administrative instruments to influence the market and could resort to them, if required.

First Deputy Governor Oleksandr Pysaruk briefed the meeting attendees on the operation of the Deposit Guarantee Fund, which is currently involved in efforts to reinforce its supervisory function. This will boost the ability of the Fund to fulfill its mandate in a more efficient manner and bring it closer to best international practices.

The representatives from the World Bank and the U.S. Department of the Treasury are already engaged by the Fund to monitor the process of winding up a bank.

At the meeting with bankers, Valeriia Gontareva also recalled the priority legislative initiatives proposed by the National Bank of Ukraine that would soon be tabled to the Parliament. To this effect, the Governor of the National Bank of Ukraine met Serhii Pybalka, Chairman of the Verkhovna Rada Committee on Financial Policy and Banking.

There is recognition of the urgent need to amend laws to impose criminal and administrative responsibility on the banks' shareholders and management for decisions leading banks into bankruptcy, and misreporting of information about the essence of transactions, the quality of assets and related party transactions.

As a side note, Memorandum on restructuring consumer loans in foreign currency is to be finalized this week as part of the cooperation program with the IMF. The agreement is being prepared for signing.