The National Bank of Ukraine has streamlined approaches to measuring the fair value of its securities holdings or that of securities accepted as collateral guaranteeing the repayment of the loans and adopted a decision to disclose its methodology to the market participants, reads  NBU Board Resolution No 732, dated October 26, 2015 On Approval of Some Executive Directives of the National Bank of Ukraine,  which shall take effect from December 1, 2015.

The disclosure of this information will bolster the confidence of banks in actions of the regulator, including its banking system liquidity regulation operations.

The principles set out in International Financial Reporting Standard 13: Fair Value Measurement lay at the core of the methodology for measuring the fair value of securities.

With a view to streamlining risk-based approaches applied by the NBU to measuring the fair value of collateral, the National Bank has approved the methodology for calculating adjusting factors for securities that are accepted as collateral guaranteeing the repayment of loans (including under repo transactions).

By December 1, 2015, the National Bank of Ukraine is due to start publishing on its official website and other information resources the zero-coupon yield curves  intended to assess domestic sovereign bonds using the Nelson-Siegel parametric model.

In addition, from December 1, 2015, the regulator will publish, on a daily basis, information about the fair value of securities that are accepted as collateral guaranteeing the repayment of loans and adjusting factors applicable to them. Guided by the Regulation On the Use by the National Bank of Ukraine of Standard Banking System Liquidity Regulation Instruments, banks will be able to use this information to manage their liquidity.