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Ukrainian lawmakers proposed new strategy for banking sector development

Ukrainian lawmakers proposed new strategy for banking sector developmentThe parliamentary committee for financial and banking operations has drawn up an alternative strategy for developing the Ukrainian banking system in 2016-2020.

The document was posted on the Facebook page by the chair of the committee Serhiy Rybalka (Oleh Liashko's Radical Party).

According to the document, the current comprehensive program on development of the financial sector until 2020 being implemented by the National Bank of Ukraine (NBU) has some flaws and collisions. This concerns the reduction of the number of banks with the synchronous adoption of EU standards, the correlation of the military conflict to internal shocks, as well as the absence of deep analytical conclusions regarding the reasons of devaluation, inflation and banking crisis.

The lawmakers proposed that a strategy for development the banking sector is drawn up jointly with the program. The deep analytical basis, taking into account the specifics of crisis in Ukraine, will be used.

Deputy NBU Board Chairman Oleh Churiy said at a roundtable devoted to the presentation of the draft strategy for developing the banking system in 2016-2020 to start public discussions held in Kyiv on Monday that the regulator does not support the ideas proposed in the strategy.

The strategy foresees expanded money printing to create systemic incentives aimed at developing exports and supporting crediting of the real sector. The representative of the central bank said that this is not in line with the targets of cutting and stabilizing inflation in the country.

Read also: NBU tightens control over bank currency transactions to prevent outflow of capital abroad

The NBU also said that the creation of the export-credit agency in coming years foreseen in the alternative strategy is also inefficient.

The regulator also said that imposing of a moratorium on the administrative increase of prices and tariffs proposed by the new strategy is also unacceptable.

The alternative strategy implies restricting NBU's powers in placing banks to the list of insolvent banks only by cases of financial insolvency and imposing a moratorium on removing banks that observe capital adequacy, liquidity and other requirements from the market.
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