A regular meeting of the Financial Stability Council, chaired by the Minister of Finance of Ukraine Oleksandr Danyliuk and with participation of the Governor of the National Bank of Ukraine Valeria Gontareva, heads of the national commissions - financial market regulators Tymuk Khromayiev and Ihor Pashko, and Deputy Managing Director of Deposit Guarantee Fund Kostyantyn Vorushylin, took place on 18 August 2016.
Members of the Council note positive trends in economic recovery. GDP growth accelerated, inflation can be forecasted, gradual recovery of amount of households deposits in banks continues. Members of the Council stressed that to preserve the mentioned trends, the soonest renewal of cooperation with the IMF is needed.
Participants of the session discussed the importance of transferring the NBU income to the State Budget of Ukraine for its further successful execution. Valeria Gontareva assured the present participants of the complete readiness of the NBU to transfer income for 2015 in the amount of UAH 38 164 billion. Furthermore, this also requires forming NBU Council, which is to approve the NBU financial reporting, as soon as possible.
Participants of the session discussed issue of recovery of lending to economy in 2017. Nonperforming judicial system, lack of laws on strengthening creditors’ rights and high debt ratio of big enterprises disrupt this process. Members of the Council noted the low performance of law enforcement in work with shareholders and top managers of failed banks. Well spread practice of collateralized assets sale by State Enforcement Service of Ukraine at considerably lower prices requires attention of law enforcement bodies.
The need for strengthening of the DGF financial and institutional capacity was also discussed at session of the Council. The NBU and Ministry of Finance of Ukraine confirmed readiness to financial support to the DGF in case of lack of funds for payments to depositors of failed banks. According to the NBU, need for additional funds will be minimal. Members of the Council agreed that the Fund’s priority for the nearest years will be sale of assets, and proposed to discuss strategic issue of further reform of the Deposit Guarantee System on the next session of the Council in October.
The Financial Stability Council highlighted the need for adopting the law, which is to change the principles of formation of banks supervisory boards. Majority of supervisory boards must consist of independent members selected on a competitive basis. The comprehensive introduction of steps provided with the Strategy for the state-funded banks development was emphasized.
Key facts on the Council
Please note that the Financial Stability Council was established by Presidential Decree in March 2015. The Council is comprised of the Governor of the National Bank of Ukraine, the Minister of Finance of Ukraine (co-chairs of the Board), the Head of the National Securities and Stock Market Commission, the Head of the National Financial Services Commission, the Managing Director of the Deposit Guarantee Fund, the First Deputy Governor of the National Bank of Ukraine, and the Deputy Minister of Finance of Ukraine. The Council provides a forum for professional discussion of systemic risk posing a threat to the country’s financial stability. In 2016, four sessions of the Council took place. Next is planned for October of the current year. In early May, the Council published its first Annual Report on Activities.