Dear Mr President, dear Prime Minister, Your Excellencies, dear ministers, colleagues.
First of all, I am grateful for such kind words from you, Mr. President. It is an honor for me to be appointed Governor of the National Bank of Ukraine. I would like to thank each of you, and the Parliament, for your trust. I assure you that our interaction is about to be taken to a new level.
Today, the Parliament, the government, and the NBU can and should stand united as a solid mechanism for building out the national economy. Together, we must create favorable conditions, including monetary and prudential ones, for sustainable economic growth. We cannot achieve this without maintaining an effective dialogue. I will do everything in my power to increase the central bank’s role in supporting the national economy of Ukraine and improving the quality of life of Ukrainians.
The NBU will remain consistent and continue to meet its commitments to the public, businesses, government authorities, and partners.
- Let me also assure you again that the NBU will retain its institutional independence. Decisions will continue to be professional and economically sound. Dear colleagues, you have my word that we will remain technocrats. This achievement of previous reforms must be preserved.
- The NBU will continue its policy of effective cooperation with international financial organizations and foreign investors. I am confident that in five years, Ukraine will have a real chance to become a regional financial hub, where investors from all over the world will seek to invest long-term.
- The NBU will continue to facilitate the implementation of the main priorities of the Strategy of State-Owned Banks. The corporate governance reform of state-owned banks has been one of the most successful in Ukraine to date. It is precisely this transformation that has turned state-owned banks into the financial sector’s most effective institutions. Further implementation of the Strategy will help strengthen competition, which, along with the NBU’s monetary policy, will aid in reducing the cost of loans to businesses and households.
The NBU’s top priority is to promote macroeconomic stability and financial sector resilience (meaning both banks and nonbank financial institutions)
During the quarantine, the banking system has proved its strength, thanks, in no small measure, to the NBU’s effective regulatory policy. Yet the coronavirus crisis is not completely over.
We must place our focus today on supporting the Ukrainian economy. To that end, the NBU needs to deploy the tools of both monetary and prudential policies.
As a central bank, we all must create the necessary conditions for enhancing lending to the real economy. One of the main drivers of loan portfolio growth today has been consumer lending, which is a fairly easy tool for banks to use, but which is not generating a positive impact on the economy or households.
The following are the methods that I believe will help the development of lending:
- The NBU must assist banks in balancing their portfolios. On the one hand, it is necessary to step up efforts to reduce the share of nonperforming loans in the banking system and improve the quality of banks’ loan portfolios. On the other hand, it is necessary to limit the use of long-term securities that banks buy with available cash instead of lending it to businesses.
- At the same time, the NBU must press forward with cutting the key policy rate, which will eventually lead to cheaper loans for final consumers – those borrowing from banks.
- We can go a long way toward easing the pressure on banks at this difficult time of coronacrisis. For instance, we need to reconsider the effectiveness of loan holidays, because as loan defaults rise, banks become less and less capable of providing affordable credit.
These measures are intended to provide businesses in the real economy with support – lending support.
Dear colleagues, I have confidence that we are up to the challenge of meeting these objectives. When it comes to team efficiency, I operate on the well-known and time-tested principles: professionalism, knowledge, and skills. As a banker with 25 years’ experience, I can tell you that in the world of finance, reputation takes precedence over everything else. I intend to follow this rule during my seven years as NBU Governor.