Central Banks of Poland and Lithuania to Help NBU Implement EU-Ukraine Association Agreement

Today the EU Twinning project for the NBU has been officially launched. The project will be implemented by the partners from Narodowy Bank Polski and the Bank of Lithuania.

The aim of the project is to contribute to the macroeconomic stability of Ukraine through institutional strengthening of the NBU, building a reliable banking and payments infrastructure, and supporting the NBU’s capacity to implement the EU-Ukraine Association Agreement.

Dmytro Sologub, Deputy Governor of the NBU, Chloe Allio, Head of Section of the EU Delegation to Ukraine, Marta Gajęcka, Board Member of Narodowy Bank Polski, and Vitas Vasiliauskas, Chairman of the Board of the Bank of Lithuania, met online to officially kick-start the Twinning project. The meeting was attended by the NBU staff, officials from relevant sectoral ministries and agencies, representatives of business associations, diplomats, academics, and journalists.

The project is funded by the EU. The project’s budget amounts to EUR 1 million.

The implementation period of the Project is from 1 October 2020 to 30 June 2022. It will involve dozens of experts from Narodowy Bank Polski and the Bank of Lithuania, accompanied by professionals from five other European national central banks.

The Twinning project focuses on four areas

The first one is developing approaches to banking supervision.

Representatives from the central banks of EU member states and the NBU will work on further implementation of Basel Core Principles for effective banking supervision and the EU legislation. In particular, the internal capital adequacy assessment process (ICAAP), the internal liquidity adequacy assessment process (ILAAP), and assessment of the banks’ risk profiles through the Supervisory Review and Evaluation Process (SREP).

The second area is implementing an instant payments system.

The project aims to help develop payment systems in Ukraine and define the most suitable model of instant payments for Ukraine, its architecture, and the road map for its implementation.

The third area is improving strategic planning in a central bank.

Strategic planning, process management, and performance monitoring at different levels of the institution will be improved based on recommendations and practical experience of the central banks of EU member states.

The fourth area is improving the European integration and international cooperation process of a central bank.

External expertise will serve to strengthen the NBU in its international activities and cooperation, in particular in implementing the EU-Ukraine Association Agreement.

For the time being, due to the Covid-19 pandemic, all activities are carried out remotely. The latest Project’s news can be followed on a special landing page.

“The NBU’s policies have served the Ukrainian economy and Ukrainian people well, maintaining macroeconomic stability, restructuring the entire banking sector, and guiding it through the COVID-19 crisis without significant losses. The NBU is already a strong, independent and technically competent institution. We are confident that this Twinning project, involving the exchange of the most recent experience with peer central banks, will help to step up the alignment with EU practices in banking and payments, and will further advance the international standing of the NBU,” said Chloe Allio, Head of Section of the EU Delegation to Ukraine.

"For Ukraine, European integration is a cornerstone on the road to pursuing national interests and building an economically developed and democratic state. EU integration is a long-term and extremely ambitious project for Ukraine, but we at the central bank are doing our best for the successful implementation of the EU-Ukraine Association Agreement. No doubt, the Twinning Project with our European partners will be an effective instrument for developing our institutional capacity, strengthening the banking system of Ukraine, and introducing innovative financial technologies. This is another important step we are taking towards the integration of the NBU into the European community of central banks,” said NBU Deputy Governor Dmytro Sologub.

“It is in the mutual interest of both the EU and Ukraine to proceed with building a modern and transparent banking system in Ukraine, with the NBU being at the forefront of this progress. Thus, the Bank of Lithuania, Narodowy Bank Polski, and the NBU are taking concrete steps under the guidance of the EU-funded Twinning project to share the best central banking practices and help all the central banks involved become more efficient and internationally active institutions creating value added for the societies of their countries,” said Governor of the Bank of Lithuania Vitas Vasiliauskas.

“Poland has always advocated close cooperation between Ukraine and EU institutions. From the perspective of Polish foreign policy, Ukraine is a key partner within the Eastern Partnership initiative as well as the Polish Development Cooperation Programme,” said Narodowy Bank Polski’s Board Member Marta Gajęcka. “It’s amazing to observe the results of our cooperation and to see how solidarity and engagement change reality. We observe the NBU’s development with satisfaction. It has become a modern, well-managed organization, appreciated in many fields and deservedly awarded for its tremendous efforts.”