The FSC traditionally focused on the most relevant issues of financial stability and risks to financial sector development.
At the October 2021 meeting, the FSC placed its focus on the progress made by the banks, in particular state-owned ones, in reducing their NPL ratios, and on the Deposit Guarantee Fund’s performance in the recovery of losses from failed banks’ ex-owners and ex-managers.
Russia’s full-scale assault on Ukraine and the resulting surge in domestic and external risks to Ukraine’s financial sector and economy as a whole have become a key challenge this year. At its April and June 2022 meetings, the FSC addressed these risks in detail and discussed a range of anti-crisis measures to minimize them. Specifically, the FSC approved key actions aimed at narrowing the state budget deficit. The FSC members agreed to make efforts to raise official funding from international partners on preferential terms, and to do their best to save Ukraine’s budgetary resources and international reserves while martial law is in effect. At the same time, the FSC members highlighted the risks associated with the monetary financing of the state budget.
In June 2022, the FSC also discussed the development of state lending support programs. Lending under state programs has been the main driver of business financing during the war, contributing more than half of the increase in the banks’ hryvnia credit portfolio. The FSC upheld the initiative of the Ministry of Finance of Ukraine to update, jointly with the Business Development Fund, plans to develop public programs that promote lending to drum up support for Ukrainian businesses and properly meet the commitment to provide interest rate compensation to banks.
The Financial Stability Council (FSC) was established by a presidential decree in March 2015. The FSC is an inter-agency body and a platform for professional discussions on financial stability.
The FSC comprises the NBU Governor, the Minister of Finance of Ukraine (co-chairing the FSC), the Head of the National Commission on Securities and Stock Market, the Managing Director of the Deposit Guarantee Fund, NBU Deputy Governors, the Deputy
Minister of Finance for European Integration, and a Deputy Head of the Office of the President of Ukraine.
The FSC identifies systemic risks and threats to financial stability and develops recommendations to mitigate their impact on the financial system.