The regulators of the financial market have signed the Strategy of Ukrainian Financial Sector Development until 2025.
An Interfax-Ukraine correspondent has reported that the document was signed by Governor of the National Bank of Ukraine (NBU) Yakiv Smolii, Finance Minister Oksana Markarova, head of the National Commission for Securities and the Stock Market Tymur Khromaev, Managing Director of the Deposit Guarantee Fund Svitlana Rekrut and a member of the National Commission for Financial Service Markets Regulation Denys Yastreb in Kyiv on Thursday.
“The goal of the Strategy is to ensure that the reform and development of Ukraine’s financial sector moves forward in line with international best practices and that the actions envisaged by the EU-Ukraine Association Agreement and Ukraine’s other international commitments are implemented,” the NBU said on its website.
The NBU said that the new strategy would replace the comprehensive program of the financial sector until 2020.
According to the report, the Strategy outlines five major priorities of financial sector development: strengthening financial stability, promoting macroeconomic development and economic growth, developing financial markets, expanding financial inclusion and introducing innovations in the financial sector.
In order to further strengthen financial stability, regulators will, among other things, focus their efforts on enhancing the protection of creditors’ and investors’ rights, implementing the BEPS action plan, improving corporate governance in financial institutions, strengthening their internal control requirements, improving the deposit guarantee system and the system for resolving insolvent financial institutions, introducing risk-based supervision over nonbank financial institutions, implementing regulatory requirements in the regulation and supervision of banks and nonbank financial institutions in accordance with the EU-Ukraine Association Agreement, etc.
Macroeconomic development will be stimulated by intensifying lending to small and medium-sized businesses, in particular to farms against security of land, by removing obstacles to restarting mortgage lending, and by financing exports. Other important tasks in this area are prudent fiscal policy, development of the market for nonbank lending, enhanced coordination of actions between the Ministry of Finance and the NBU, introduction of the pillar 2 pension system and improvement of the regulation of the pillar 3 pension system, and development of the domestic market for government securities.
To develop financial markets, the regulators will work to complete the currency liberalization, to create liquid markets for financial instruments (derivatives, corporate stocks and bonds, etc.), to deregulate markets for nonbank financial services that are associated with low risks or are out of alignment with EU practices, to regulate insurance activities in line with Solvency II and IAIS principles, to ensure that insurance intermediaries are regulated, to legislate prerequisites for the development of markets for credit unions and financial leasing services, to modernize stock exchange and depository infrastructure, to create a comprehensive information system for stock exchange monitoring, to implement international standards for the operation of capital markets infrastructure (CSDR, EMIR, MIFID II, MIFIR, PFM requirements), and more, the NBU said.
In order to increase financial inclusion, financial institutions’ market behavior standards and financial products disclosure standards will be implemented, targeted programs for improving the financial literacy of the public will be strengthened, consumer protection will be enhanced, incentives will be created for the development of cashless payments infrastructure, and the deposit guarantee system will be expanded and streamlined.
According to the report, financial sector innovations will cover a wide range of activities, including developing the BankID remote identification system, creating a crowdfunding and venture capital platform and regulatory sandboxes, introducing new payment and transfer technologies, increasing financial market participants’ access to public registers, developing big data, blockchain, cloud technologies, and so on.
The central bank said that the Strategy envisages the reform of all segments of the financial sector.
“The implementation of the Strategy will create a transparent, competitive, stable, and high-tech financial sector over the course of five years. As such, it will drive the sustainable and inclusive development of the Ukrainian economy and contribute to improving the welfare of households through the efficient accumulation and redistribution of financial resources in the economy,” the NBU said.
