The Council for Financial Stability states lowering of systemic risks

On May 24, the Council for Financial Stability held a meeting chaired by the Head of the National Bank Valeriya Gontareva, involving Minister of Finance Oleksandr Danylyuk, heads of the national regulating agencies for the financialmarket Tymur Khromaev and Igor Pashko as well as managing director of the State Deposit Fund Kostyantyn Vorushylin.

The Council stated an improvement of the economic situation in Ukraine since last Council’s meeting in the beginning of March this year. The major points of the improvement include inflation which slowed down to the one-digit rate, the resumed economic growth, gradual re-gain of trust to the banking sector by citizens and business as we as the stabilized currency market. However, more time is needed to entrench these positive trends.

At the same time, certain risks for the financial stability are still in place. Council member emphasized the importance of the second review under the IMF program “Extended Fund Facility”. The IMF mission had a productive stay inUkraine, and the efforts of the Ukrainian Government should be focused on the implementation of preliminary measures set by the IMF which are the basis for receiving the next tranche from the IMF and other international partners.

Taking into account the favorable trends, Council members approve further liberalization on the currency market. It was also agreed on feasibility to abolish a pension fee charged on the purchase of foreign currency.

The Council also discussed the current operation of state-owned banks. The Ministry of Finance confirmed its plans to implement best practices in corporate management at state-owned banks and to start preparations to attract foreign investors for the state-owned banks.

Key facts on the Council

The Council for Financial Stability was founded in March 2015 according to a Presidential decree. The members of the Council are the Head of the National Bank, the Minister of Finance (both are co-chairmen of the Council), the Head ofthe National Commission for Securities and Stock Market, the Head of the National Commission for the State Regulation of Financial Services, the Managing Director of the State Deposit Fund, the Deputy Head of the National Bank and the Deputy Minister of Finance. The Council is a platform for the professional discussion of systemic risks for the financial stability of the country. The Council held three meetings in 2016; the next meeting is scheduled for the end of July 2016. In the beginning of May the Council published its first working report.