Financial Stability Council Report on Activities (August 2020 – July 2021)
Financial Stability Council
The Financial Stability Council (FSC) was established by a presidential decree in March 2015.
The FSC identifies systemic risk and threats to financial stability and develops recommendations to minimize their impact on the financial system. The FSC is an inter-agency body and a platform for professional discussions on financial stability.
Key Functions of the FSC:
- identify, analyze, and assess systemic risks and threats to financial stability
- prepare recommendations to minimize systemic risks
- coordinate measures to prevent crises and respond quickly to their manifestations
- coordinate cooperation between government agencies that affect financial stability.
FSC decisions are nonbinding. Although the FSC does not interfere with the activities of its constituent bodies, it collectively develops public policy proposals that pursue financial stability.
The FSC holds financial stability meetings at least once a quarter.
Information, analytical, and logistical support of the FSC’s activities is provided by the NBU.
FSC composition:
- NBU Governor
- Minister of Finance
- Head of the National Securities and Stock Market Commission
- Managing Director of the Deposit Guarantee Fund
- NBU First Deputy Governor
- Deputy Minister of Finance for European Integration.
FSC committees
In order to be effective, the FSC has established several working groups (committees). The groups aim at developing mechanisms for cooperation and coordination of actions to ensure financial stability in Ukraine, and preparing recommendations for mitigating systemic risks to the stability of Ukraine’s banking and/or financial system. It is at the committee level that various the regulators coordinate their legislative and regulatory proposals regarding finance.
Annual Reports
FSC committees
The main task is to develop and agree with the Deposit Guarantee Fund, the Ministry of Finance, and the NBU the following actions:
- restructuring the Deposit Guarantee Fund’s debt
- reducing the expected additional burden on the banking system
- coordinating future changes in the Deposit Guarantee Fund’s procedure for crisis episodes, while making sure that the burden on the state budget is kept to a minimum
- increasing the covered deposit amount
- making changes to the system of financing the Deposit Guarantee Fund to meet the requirements of EU directives.
Committee Composition: Chairman and members are representatives of the Ministry of Finance of Ukraine, the NBU, and the Deposit Guarantee Fund.
The main task is to develop and provide recommendations to the governing bodies of state-owned banks with regard to:
- strategies, policies, methodologies, and procedures for NPL resolution
- possible terms of restructuring (sale of rights of claim, out-of-court settlement of creditor’s claims, enforcement, cancellation of part of the debt, conversion of debt into capital, etc.)
- application by the bank of measures (methods) to reduce credit risk
- application of procedures for resolving NPLs
- application of financial restructuring procedures.
Committee Composition: Chairman, Deputy Chairman, and members are representatives of the Ministry of Finance of Ukraine, the NBU, the Deposit Guarantee Fund, and law enforcement authorities.
Main tasks:
- identifying directions and priorities for implementing the Strategy of Ukrainian Financial Sector Development until 2025
- facilitating the coordinated implementation of the measures stipulated in the Strategy of Ukrainian Financial Sector Development until 2025, and monitoring the effectiveness of their implementation
- reviewing proposed action plans for the financial sector’s development.
Committee Composition: Chairman, Deputy Chairman, Secretary, and members are representatives of the Ministry of Finance of Ukraine, the NBU, the Deposit Guarantee Fund, the National Securities and Stock Market Commission.