22.06.2017, 22:11
National Bank of Ukraine Moves the Financial Sector Reform Forward
OREANDA-NEWS. The National Bank of Ukraine is proceeding with projects and measures under the Comprehensive Program for the Development of Ukraine’s Financial Sector till 2020. This was stated by Deputy Governor of the National Bank of Ukraine Mr Roman Borysenko speaking at the Information Day devoted to the reform of the financial sector.
"Starting from 2015, the NBU is working on reforming the financial sector every day and will continue to this work. Our Aim is to ensure price and financial stability with the goal of contributing to sustainable economic development. The continuous implementation of the Comprehensive Program will allow to build up a healthy, developed financial market with transparent and clear rules in all areas, institutionally independent and professional regulators, as well as an effective and reliable system for protection of the rights of financial services consumers and creditors. The practice allows to be able to join the European community of central banks and enter the single internal market of financial services of the EU. The Comprehensive Program is fully based on the requirements of the EU-Ukraine Association Agreement, so our course is correct," said Roman Borysenko.
During the presentation of the results for 2016-2017, the Director of the NBU Strategy and Reforming Department Mr Mykhailo Vidiakin emphasized that reforms in the country are always interdependent and their level of progress affects related industries.
"The financial sector can not stand apart from other areas and processes. At least 11 measures of the Comprehensive Program depend on the success of reforms in other areas of social and political life. These are anti-corruption, pension, judicial, land, tax reforms, reform of the executive service and public finance, as well as privatization. Our efforts in the financial sector will not be quite successful without progress in these areas, "said Mr Mykhailo Vidiakin.
In addition, in the report he separately focused on the most successful projects in 2016-2017.
"The first achievement is the banking system improvement, the work on this task has been carried out over the past three years, and we already see the first results. For the first time since 2013, the system demonstrates profitable activity in the amount of UAH 9.4 billion for four months in a row. Banks solved the most acute issues with liquidity and capital. The next issue on the agenda is to restore lending in 2017, at the solution of which the bankers look optimistically. For the first time in last two years majority of banks expect speed-up in lending to households over the following 12 months. It was stated by 88% of financial institutions that were surveyed by the NBU in spring 2017 compared with 46% in the previous quarter," stressed Mr Mykhailo Vidiakin.
The second most important project is the process of the FX liberalization.
"During the reporting period, the National Bank has intensified the gradual easing of currency restrictions within the framework of gradual monetary policy easing. In December 2016, NBU introduced concept of new foreign exchange regulation model. FX liberalization moves gradually in several stages, starting with restrictions on foreign trade operations and foreign direct investment. Our goal is transition to a liberal model of foreign exchange regulation, which will be implemented after the adoption of new legislation instead of the obsolete. Work on the new Law On Foreign Exchange is almost completed. According to the schedule, the first draft law will be presented for discussion this summer", said the Director of the NBU Strategy and Reforming Department.
The third achievement was the implementation of a cashless-economy project in Ukraine, a roadmap for implementation of which has already been prepared and is currently undergoing work with other institutional participants of the project, and also he recalled that the level of cash in the economy is gradually decreasing and it is equal to 14 % of GDP of the beginning of 2017 .
In 2017 -2018, the NBU identified 19 priority areas for the implementation of the Comprehensive Program. Implementation of most of them takes place according to the schedule of project documentation. In 2016-2017, 20 new projects were opened in various areas, in particular, in banking supervision, the NBU internal transformation, development of capital markets, consumer rights protection, as well as technologies and innovations.
However, such projects as the transfer of functions previously performed by the National Commission for the State Regulation of Financial Services Markets (SPLIT project), the establishment of system for protection of the rights of consumers of financial services and the strategy of state banks lag behind the schedule of their implementation and have some impediments to implementation since they do not receive legislative support.
"We do not currently have the appropriate legislative support for many projects but we hope to get it. We very much regret that this Tuesday the completely finished draft law No. 2456-d regarding consumer protection was again returned by the Parliament to the relevant committee for finalization to get it finalized to proceed to a second re-reading, and draft law No. 5361-d regarding the development of payment systems and cashless settlements was rejected. All that consumes time. We hope that next time the deputies will support the draft laws, and after their approval, the NBU will be able to implement the related reform projects", noted the Director of the NBU Strategy and Reforming Department.
"Starting from 2015, the NBU is working on reforming the financial sector every day and will continue to this work. Our Aim is to ensure price and financial stability with the goal of contributing to sustainable economic development. The continuous implementation of the Comprehensive Program will allow to build up a healthy, developed financial market with transparent and clear rules in all areas, institutionally independent and professional regulators, as well as an effective and reliable system for protection of the rights of financial services consumers and creditors. The practice allows to be able to join the European community of central banks and enter the single internal market of financial services of the EU. The Comprehensive Program is fully based on the requirements of the EU-Ukraine Association Agreement, so our course is correct," said Roman Borysenko.
During the presentation of the results for 2016-2017, the Director of the NBU Strategy and Reforming Department Mr Mykhailo Vidiakin emphasized that reforms in the country are always interdependent and their level of progress affects related industries.
"The financial sector can not stand apart from other areas and processes. At least 11 measures of the Comprehensive Program depend on the success of reforms in other areas of social and political life. These are anti-corruption, pension, judicial, land, tax reforms, reform of the executive service and public finance, as well as privatization. Our efforts in the financial sector will not be quite successful without progress in these areas, "said Mr Mykhailo Vidiakin.
In addition, in the report he separately focused on the most successful projects in 2016-2017.
"The first achievement is the banking system improvement, the work on this task has been carried out over the past three years, and we already see the first results. For the first time since 2013, the system demonstrates profitable activity in the amount of UAH 9.4 billion for four months in a row. Banks solved the most acute issues with liquidity and capital. The next issue on the agenda is to restore lending in 2017, at the solution of which the bankers look optimistically. For the first time in last two years majority of banks expect speed-up in lending to households over the following 12 months. It was stated by 88% of financial institutions that were surveyed by the NBU in spring 2017 compared with 46% in the previous quarter," stressed Mr Mykhailo Vidiakin.
The second most important project is the process of the FX liberalization.
"During the reporting period, the National Bank has intensified the gradual easing of currency restrictions within the framework of gradual monetary policy easing. In December 2016, NBU introduced concept of new foreign exchange regulation model. FX liberalization moves gradually in several stages, starting with restrictions on foreign trade operations and foreign direct investment. Our goal is transition to a liberal model of foreign exchange regulation, which will be implemented after the adoption of new legislation instead of the obsolete. Work on the new Law On Foreign Exchange is almost completed. According to the schedule, the first draft law will be presented for discussion this summer", said the Director of the NBU Strategy and Reforming Department.
The third achievement was the implementation of a cashless-economy project in Ukraine, a roadmap for implementation of which has already been prepared and is currently undergoing work with other institutional participants of the project, and also he recalled that the level of cash in the economy is gradually decreasing and it is equal to 14 % of GDP of the beginning of 2017 .
In 2017 -2018, the NBU identified 19 priority areas for the implementation of the Comprehensive Program. Implementation of most of them takes place according to the schedule of project documentation. In 2016-2017, 20 new projects were opened in various areas, in particular, in banking supervision, the NBU internal transformation, development of capital markets, consumer rights protection, as well as technologies and innovations.
However, such projects as the transfer of functions previously performed by the National Commission for the State Regulation of Financial Services Markets (SPLIT project), the establishment of system for protection of the rights of consumers of financial services and the strategy of state banks lag behind the schedule of their implementation and have some impediments to implementation since they do not receive legislative support.
"We do not currently have the appropriate legislative support for many projects but we hope to get it. We very much regret that this Tuesday the completely finished draft law No. 2456-d regarding consumer protection was again returned by the Parliament to the relevant committee for finalization to get it finalized to proceed to a second re-reading, and draft law No. 5361-d regarding the development of payment systems and cashless settlements was rejected. All that consumes time. We hope that next time the deputies will support the draft laws, and after their approval, the NBU will be able to implement the related reform projects", noted the Director of the NBU Strategy and Reforming Department.
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