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NBU and World Bank Leadership Discuss Drafting New Framework Program of Cooperation for 2022–2025

NBU and World Bank Leadership Discuss Drafting New Framework Program of Cooperation for 2022–2025

NBU Governor Kyrylo Shevchenko and his deputies Yuriy Heletiy, Yaroslav Matuzka, and Sergiy Nikolaychuk met on 14 September with Anna Bjerde, World Bank Vice President for Europe and Central Asia, and Arup Banerji, World Bank Regional Country Director for Eastern Europe.

"The NBU and the World Bank have been cooperating on a large number of joint projects. There have been times when we had two working meetings a day," said Kyrylo Shevchenko, describing how actively the two institutions collaborate.

The purpose of Anna Bjerde’s September visit to Ukraine is to start preparing a new Framework Program for World Bank Cooperation with Ukraine in 2022–2025 and to identify areas in which the World Bank can support Ukrainian reforms.

This is precisely why the meeting focused on identifying priorities for joint work, including important issues such as the NBU’s mandate to regulate the nonbank financial sector, efforts to reduce the banking system’s NPLs, and the progress of corporate governance reform and state-owned banks privatization. 

"The NBU is well aware that a successful privatization of state-owned banks is only possible with the introduction of good corporate governance practices. This is why we always discuss both issues at the same time," said Kyrylo Shevchenko. The plan is to reduce the state’s share to 25% from more than 50% by 2025, making the Ukrainian banking system more independent, and encouraging banks to operate on market-driven principles, he said.

The NBU’s leadership informed the World Bank representatives about the regulator’s latest decisions, including the key policy rate increase to 8.5% per annum, the rollback of anti-crisis measures, starting in Q4, and the approval by the NBU Council of the Monetary Policy Guidelines for 2022 and the medium term. 

The participants also discussed the status of the passage of important draft laws: Draft Law No. 5850 On Amending Certain Laws of Ukraine Concerning Certain Issues Related to the Activities of the National Bank of Ukraine, Draft Law No. 5542–1 On Amendments to Certain Laws of Ukraine Concerning Ensuring the Stability of the Households Deposit Guarantee System, and Draft Law No. 3205–2 On the Partial Guarantee Fund for Agricultural Loans. 

In recent years, the NBU has evolved into a powerful modern regulator, said Anna Bjerde. The matter of its independence thus remains extremely important.

The World Bank and the Ukrainian government need to continue to work together to implement the second tier pension system, which is only possible with a proper development of the country’s stock market and a strong regulatory framework, said Arup Banerji.

Overall, the World Bank leadership noted the NBU’s progress in all of these areas, and expressed its intention to keep providing technical assistance for the implementation of reforms.

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