“Today, Ukraine has every chance to clean up, and improve the health of the financial sector, and to enhance the role of the banking sector in the country’s economic development,” said NBU Governor Stepan Kubiv at an international investment conference.

He added that the National Bank was planning to become a state institution that is open for dialogue. “The best investors in Ukraine are Ukrainian citizens,” said the governor, “and the National Bank is willing to use every tool it has at its disposal to raise Ukrainians’ confidence in the banking system, and to protect depositors' interests to the best of its abilities.”

“At present, the National Bank is implementing a number of short- and long-term measures to that end,” he added. The National Bank has chosen providing liquidity support for stressed banks as its top priority task.

“There is enough liquidity in the banking system. This is evidenced by the large amounts of funds (UAH 24 - 30 billion) held in bank correspondent accounts,” says Kubiv, “Today, banks should put their financial health and depositors’ interests before everything else, which should help ensure the health of the whole banking system. Such banks will receive clear and complete support from the regulator.”

The governor also said that the National Bank and the government were fully aware that external financing was essential for ensuring that there is a stable financial sector and existing imbalances are gradually removed. In this light, cooperation with leading international investors, especially with the IMF, is of great importance.

While talking about the central bank’s long-term goals, Kubiv stressed that “maintaining the exchange rate at a certain level is not a market tool,” and announced the adoption of inflation targeting. “A transition to a middle-term inflation target is a significant change in monetary policy, which will allow us to manage monetary processes more effectively, and to safeguard macro-financial stability. Work in that direction is already under way,” he added.

Another task for the future is creating a financial sector with transparent corporate governance. With that in mind, the National Bank will carry out stress tests in banks, and will continue to introduce consolidated banking supervision.

“Civilized market and customer relationship rules will make Ukraine’s banking sector attractive to external capital inflows,” said Kubiv.

He promised that the banking system, together with its regulator, would be reliable, stable, law-abiding, and absolutely transparent. To ensure that, the National Bank is currently devising a development strategy for the banking system for the term up to 2020.

“Only the central bank’s independent view of the economy, clear-cut and feasible goals that can be explained to people will allow us to find a balance between the interests of the real sector, government, National Bank and other banks,” he said in summary.