A working meeting between senior executives of the National Bank of Ukraine and the Anti-Monopoly Committee of Ukraine (hereinafter the AMCU) has been held at the NBU. NBU representatives at the meeting included NBU Governor, Ms Valeria Gontareva, and her Deputy Governors, Mr Yakiv Smolii, Mr Vladyslav Rashkovan and Mr Dmytro Sologub. The meeting also featured Head of the AMCU Mr Yuriy Terentyev, First Deputy Head of the AMCU and State Commissioner, Ms Mariya Nizhnyk,  and State Commissioner Ms Anna Artemenko.

Ms Gontareva expressed the NBU's readiness to engage in fruitful cooperation with the AMCU.

“The NBU is responsible for reforming the financial sector and is open for dialogue and cooperation with all the ministries and agencies. One of the priorities as part of measure А.1 under the NBU’s Comprehensive Program of Financial Market Development of Ukraine until 2020 is to increase competition in the banking and non-banking markets, as well as related services markets (appraisal, ratings and auditing services).  Therefore, we will be grateful to the AMCU for providing assistance in implementing our strategy,” stressed the NBU Governor.

In his turn, the Head of the AMCU backed the proposal by the NBU to forge constructive dialogue between the public institutions and underlined the need to pool efforts to implement the program aimed at boosting competition, which is currently being developed by the AMCU.  

“We are interested in establishing effective institutional relations with the central bank, especially in the area of information sharing with regard to competition. The NBU has a well-functioning framework to monitor inflation developments.  The AMCU, which monitors negative consequences of price fluctuations for the competitive environment, can also benefit from practices used by the NBU,” said Mr Terentyev.

Mr Sologub raised an issue related to an impact that monopoly and oligopoly market structures have on price levels in the country and shared practices used by the central bank’s analytical services in monitoring prices, including a web scraping method that allows to detect deviations from the norm in certain commodity and geographical markets.  The NBU representatives have initiated establishing information sharing mechanisms on this issue with the AMCU.  This initiative was backed by the AMCU. 

NBU Deputy Governor, Mr Rashkovan outlined another important area for future cooperation between the NBU and the AMCU.   “The legislative initiative put forward by the NBU is intended to simplify merger procedures for banks, which means allowing small and middle-sized banks whose market share is below 0.5 – 1% not to apply to the AMCU for permission for merger. This move makes the merger process much simpler and streamlined.   Speaking about the banking sector in general, its consolidation is relatively moderate, thus mergers and takeovers of small and middle-sized banks will in no way jeopardize competition in the market.  Hopefully, we will be able to will coordinate our efforts and reach a consensus on this issue,” underlined Mr Rashkovan.

NBU Deputy Governor, Ms Rozhkova shared central bank’s experience in encouraging banks to disclose their ownership structures and carrying out assessment and reviews of the banks' related party loans. The meeting participants pointed out that the AMCU may find the methodology deployed by the NBU useful and adopt in their work. 

The meeting participants also explored other potential areas for future cooperation between the NBU and the AMCU. In particular, they discussed the eligibility criteria to be used to select banks to work with the Deposit Guarantee Fund, the Pension Fund of Ukraine and peculiarities of cooperation between banks and insurance companies.  The NBU representatives said that they opposed to the idea of establishing artificial monopolies when it comes to holding competitive tenders to select banks for payroll programs by public companies.

The meeting participants agreed to hold joint meetings on a regular basis.  It was decided to invite senior executives of the State Fiscal Service of Ukraine to the next meeting to work out a common strategy to address transfer pricing and encourage de-offshorization of the Ukrainian business..