Ukraine needs to dramatically increase the NBU and the Deposit Guarantee Fund transparency

The draft legislation on increasing the transparency of and the public control over the National Bank and the Fund for Guaranteeing Bank Deposits is based primarily on world experience and is intended to enhance the institutional capacity of these important bodies, said Serhiy Rybalka

Date: November 24, 2016

The draft legislation on increasing the transparency of and the public control over the National Bank and the Fund for Guaranteeing Bank Deposits is based primarily on world experience and is intended to enhance the institutional capacity of these important bodies, said Serhiy Rybalka, the chairman of the Parliamentary Committee on Financial Policy and Banking Activity, at the roundtable.

Several dozens of experts, bankers and financial scientists have gathered at the round table in the Verkhovna Rada profile committee to discuss the draft law on the transparency of the National Bank of Ukraine and increase its responsibility to the public, as well as on introducing amendments to the legislation on individuals' deposit guarantee system.

According to Serhiy Rybalka, the "independence" of the National Bank should not in any way be misinterpreted as the "lack of control" over its activities and its leaders being freed of responsibility for their decisions and policies.

"I will not once again revisit the issue of multiple claims made by experts on the NBU work. These mostly concerned the way the central bank excessively squeezed the monetary system, its currency regulation, and the "surreptitious" purges of the domestic banking system. Even foreign specialists noted the excessive furtiveness of the National Bank and lack of sufficient interaction with the government," Rybalka stated.

The MP stressed the fact that the innovations that have been launched in the domestic banking legislation are expected to build inside the NBU the system of internal checks and controls, and reminded that according to the Constitution this work is to be performed by the National Bank Council.

In his opinion, this is the reason why this body should be provided real mechanisms for assessing the work of the NBU Board.

At the same time, Serhiy Rybalka noted that the members of the Committee led by him and the outside experts used a similar successful worldwide and, first and foremost, European experience to develop the changes in the above legislation.

The two years of the vast bank crisis that swept throughout the country have clearly demonstrated that the transparency of the National Bank and the Deposit Guarantee Fund have to be drastically enhanced. To this effect, we decided to follow in the footsteps of the European central banks," concluded Serhiy Rybalka, the Chairman of the Verkhovna Rada Committee on Financial Policy and Banking.

Speaking about the proposed bills, Mr. Rybalka noted that if passed into laws they will revamp the system of bank deposit guarantees.

The MP is confident that the practice of addressing the solvency problems of deceived investors haphazardly, at the expense of millions of taxpayers is both unethical and unacceptable and the system should not allow this to happen.

At the same time, the financial system should not work to destroy dozens of banks by distributing their residual assets but instead stimulate banking institutions to take less risks and be always there to save banks, individual and corporate deposits in the murky times of trouble.

Serhiy Rybalka also reminded that the Radical Party has initiated a bill to amend the Constitution of Ukraine, in particular the texting about of the NBU's goals and boundaries of responsibility, which already was backed up by almost two hundred MPs from all parliamentary factions.

According to previous reports, the bills discussed at today's round table have been developed as part of the Banking System Development Strategy 2016-2020 - Synergy of Development of Banks and Industrialization of the Economy." The strategy was approved by the Verkhovna Rada Committee on Financial Policy and Banking Activities and recommended to the Cabinet of Ministers and the National Bank for guidance.


Source: rbc.ua
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