Withstanding Challenges of Full-Scale Russian Aggression against Ukraine Remained Financial Stability Council’s Focus over Past 12 Months
The NBU has published the ninth Report on the Activities of the Financial Stability Council (“the Council”) for the period from August 2023 to July 2024.
The Council’s key decisions over the specified period centered on the measures set forth in the Memorandum of Economic and Financial Policies signed with the International Monetary Fund.
These measures included:
approving a concept note for establishing a fully functional system of war risk insurance in Ukraine
adopting a Lending Development Strategy, the implementation of which, through the joint actions of the NBU and the government, will strengthen the role of the financial sector in economic recovery
setting a target for the deposit guarantee system at 3.5% and a deadline of 1 January 2028 for meeting the target, in order to capitalize the system to cover possible losses.
The Council’s members reviewed the results of the NBU’s 2023 bank resilience assessment.
The assessment showed that the banking sector is in a satisfactory state, allowing the NBU to impose the next round of regulatory requirements in line with European standards.
The Council’s members also regularly monitored current systemic risks and their potential impact on the financial sector and the economy as a whole.
In the reporting year, the ongoing full-scale war and the intensification of russian terror against Ukraine’s civilian infrastructure remain the dominant risk to the financial sector.
However, further inflows of international assistance and businesses’ adaptation to the extreme conditions of the war enabled the Ukrainian economy to gradually recover and the financial sector to remain resilient and capable of withstanding current challenges.
Background
The Financial Stability Council was established by a presidential decree in March 2015. The Council is an inter-agency body and a platform for professional discussions on financial stability.
During the reporting period, the Council consisted of: NBU Governor Andriy Pyshnyy, Minister of Finance of Ukraine Serhii Marchenko (co-chairs of the Council), First Vice Prime Minister and Minister of Economy of Ukraine Yuliia Svyrydenko (from May 2023), Head of the National Securities and Stock Market Commission Ruslan Mahomedov, Managing Director of the Deposit Guarantee Fund Svitlana Rekrut (until July 2024), acting Managing Director of the Deposit Guarantee Fund Olha Bilai (from July 2024), NBU First Deputy Governor Kateryna Rozhkova, NBU Deputy Governor Dmytro Oliinyk, Deputy Minister of Finance of Ukraine for European Integration Yurii Drahanchuk, and Deputy Head of the Office of the President of Ukraine Rostyslav Shurma.
The Council identifies systemic risks and threats to financial stability and develops recommendations in order to minimize their impact on the financial system.
