On Tuesday, 279 Ukrainian MPs voted in favor of the law No.4367 On Amendmends to the Law of Ukraine On Banks and Banking.
The ‘banking’ policy that was long perceived as a prerequisite for a new IMF loan aimes to bring Ukraine’s banking laws in line with the EU legislation, reforming corporate governance in banks, strenghtening responsibility of their executives and advisors, and updating risk managment and internal control systems.
Among the key updates, the newly adopted law
(a) introduces a new capital structure (capital buffers) set to improve bank capacity to absorb losses
(b) specifies qualifications and competencies’ requirements for members of bank supervisory and management boards
The policy is also set to bring changes to supervisory instruments with the regulator (a) now given an authority to bring in changes to a bank supervisory board and/or management boards once their members prove failing at effective banking management and control, and (b) granting the regulator a right to establish specific economic ratios depending on risk policies of banks.
It also removes the norm that authorized National Bank of Ukraine to grant guarantees and bailouts, but gives it wider access to information on persons affiliated with banks.
According to National Bank of Ukraine’ Governor Kyrylo Shevchenko, the law got backing from the IMF representative and is seen as one of the key steps that could unlock the earlier standby deal set to help Kyiv grapple with economy crisis and Covid pandemic challenges.