Speaking at the meeting with representatives of mass media today, Governor of the National Bank of Ukraine Valeriia Gontareva said that the World Bank had approved a USD 500 million development policy loan (DPL 2) to support a banking sector rehabilitation program.
This program is aimed at putting Ukraine’s banking system back on a sound footing, improving its performance and resilience to both domestic and external risks, which envisages strengthening the financial, and regulatory capacity of the Deposit Guarantee Fund for the resolution of insolvent banks.
“Presently, the future looks bright for the Deposit Guarantee Fund. Among other things, this is due to amendments to the legislation that provide for the possibility for credit resources to be used to fund this institution,” said Ms Valeriia Gontareva.
During a meeting with journalists, she said that, prompted by the need to calm the interbank foreign exchange market, the regulator had intervened in the interbank foreign exchange market for the second time this week with two-way UAH 12.45-12.6 /USD 1 quotations. The National Bank of Ukraine intervened by selling USD 31.45 million and buying USD 35 million on that day. The market closed at UAH 12.4916 per USD 1.
This said, Ms Valeriia Gontareva drew the attention of journalists to the possibility of the National Bank imposing ad hoc administrative measures to stabilize the foreign exchange market if market players continued to exhibit irrational behavior.
Ms Valeriia Gontareva also said that in the coming days she intended to table a draft law on the protection of creditors’ rights in the Committee on Economic Reforms, whose member she is.
“The proposed law is meant to establish strict requirements with regard to the protection of creditors’ rights and a very simple, understandable and transparent foreclosure procedure. The National Bank of Ukraine is committed to exerting efforts to get this draft law enacted as it would help improve the investment climate in the country,” she noted.
With regard to plans to reform the regulator, Ms Valeriia Gontareva noted that the reform was intended to upgrade all the processes and reshape the organizational structure of the National Bank of Ukraine, rather than just being limited to disposing of non-core assets. Ms Valeriia Gontareva cited an example of the central banks of the countries comparable in size and population to Ukraine that have one-fifth as many employees as the National Bank of Ukraine does. However, these figures cannot be compared because unlike other central banks, the National Bank of Ukraine has a lot of non-core assets and staff. We will implement the reform to reshape the National Bank of Ukraine in a consistent manner, drawing on the successful experience of the world's central banks.