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.

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.

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.

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.

The Council’s key tasks include:

data exchange, identification and monitoring of systemic risks
recommendations on mitigation of systemic risks
coordination of rapid response measures under financial crisis episodes
coordination of internal and external communications under emerging crisis situations in financial sector.

The Council holds meetings at least quarterly and publishes press releases and annual report on its activity.

The Council is made up of representatives from the National Bank of Ukraine, the Ministry of Finance of Ukraine, the National Securities and Stock Market Commission, the National Commission for the State Regulation of Financial Services Markets, and the Deposit Guarantee Fund. The Council’s decisions are non-binding recommendations.

Co-chairs of the Council:

Governor of the National Bank of Ukraine
Minister of Finance of Ukraine

Chair of the Council:

Chair of the National Securities and Stock Market Commission
Managing Director of the Deposit Guarantee Fund
Two Deputies Governor of the National Bank of Ukraine
Deputy Minister of Finance of Ukraine, responsible for European Integration
Deputy Head of the Office of the President of Ukraine

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, the Office of the President of Ukraine and law enforcement authorities.

Main tasks:

identifying directions and priorities for implementing the Strategy of Ukrainian Financial Sector Development
facilitating the coordinated implementation of the measures stipulated in the Strategy of Ukrainian Financial Sector Development, 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, the Ministry of Economy of Ukraine.