Serhiy Rybalka: It is necessary to restructure the system so that NBU fulfills the function of an effective banking supervision

The VR Committee on Financial Policy and Banking at its meeting decided to recommend to the Parliament adopting as a basis the Bill on Amendments to Certain Laws of Ukraine on Enhancing the Regulatory Performance of the National Bank of Ukraine (register No. 5304)
Date: January 18, 2017

The chairman of the Financial Committee, Serhiy Rybalka, believes that this bill supplements the draft law on the National Bank sponsored by the Radical Party, which was supported by the relevant VR committee. "This bill is another step toward the implementation of the Strategy for the Development of the Banking System, which our Committee approved last year. The document is also a logical supplement to our general draft law on increasing the transparency and accountability of the National Bank of Ukraine, which we supported at the end of last year," said Serhiy Rybalka. During the discussion, the MPs decided that the bill should be finalized during its preparation for the second reading.

Serhiy Rybalka noted that this effort should be supported by a special task force, which would include MPs, representatives of the Financial Committee, the NBU and other state authorities. "We are not talking about concrete persons. It is necessary to revamp the system in such a way that the National Bank finally starts performing its basic function of the effective banking supervision. We want the system not to destroy banks but to help them, to stabilize the entire system, to credit the Ukrainian economy. None of those banks that were categorized as problematic were saved and all of them ended up liquidated by the Deposit Guarantee Fund. It means we need to revitalize the system and all the members of our committee agree on this. The only question is by using what methods and mechanisms," said Serhiy Rybalka.

The Committee also recommended to the Verkhovna Rada to adopt the first version of the draft law on facilitation of procedures for capitalization and reorganization of banks (No. 5539). This is the bill of temporary validity that lasts until August 1, 2020 and proposes to cut down the time normally spent for the review of documents and to update procedures for capitalization and reorganization of banks.

Of course, we should improve the procedures for replenishment of bank capital. It is necessary to write simpler rules that the small banks will follow to merger with the more robust ones so that only the best, i.e., the most reliable and the most efficient banking institutions remain on the market.

He invited his colleagues in the Committee, jointly with banking associations and experts, to closely monitor the process of re-capitalization. "We must timely interfere with the NBU attempts to stifle the healthy Ukrainian small and medium-sized banks. Our common task is to create conditions for the development of banks with the Ukrainian private capital. This is a strategic task, given the long-term goals of Ukraine's economic development," added the Head of the Finance Committee.

In addition, representatives of the Committee supported the draft law on amending the Law of Ukraine "On State Regulation of the Securities Market in Ukraine" (regarding the improvement of the procedures for collecting fines and penalties imposed on legal entities for violations in the securities market) (No. 4,956). The bill proposes to drastically change the way the National Securities Commission applies sanctions to legal entities for violating the securities legislation by establishing specific mechanisms of enforcement without a court decision in the course of legal proceedings.

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