OREANDA-NEWS. December 02, 2009. The NBU has softened the conditions for introducing temporary administrators in banks. Specifically, starting from 28 November 2008, temporary administrations will be assigned to commercial banks if their regulative capital standard (H2) is lower that 7%. Previously, the temporary administration was introduced once a bank's regulative capital decreased by 30% in six months and the bank failed to fulfill more than 10% of its obligations for five days.

Millennium Capital sees the news to be positive, since it will accelerate the recovery of the banking system by either the rehabilitation of healthy banks or by liquidation of near bankrupt banks within a year. However, significant reserves for problem loans will increase the H2 standard, which is currently common for domestic banks (on average, H2 came to 15.63% in 9M09). Therefore, the additional requirements are needed in order to assign temporary administrations to commercial banks.