At its meeting on 13 May, the Financial Stability Council (the FSC) focused on preparations for the eighth review under the Extended Fund Facility program with the International Monetary Fund and adopted a number of decisions.
First, the FSC approved amendments to the Strategy of Ukrainian Financial Sector Development, in particular:
- the addition of new measures concerning the legislative regulation of the Business Development Fund activities, the development of a mortgage lending strategy, and the enhancement of the resilience of critical infrastructure and the financial sector’s digital operational resilience
- the update of measures aimed at developing capital market infrastructure, in particular regarding the alignment of the target operating model of the market in cooperation with stakeholders (including the consolidation of accounting infrastructure and engagement of foreign investors), and its implementation. These changes will enable the reform of the market and maximize opportunities for attracting private investment
- the expansion of Goal 3 Financial System Operates for the Country’s Recovery and Is Integrating into the EU to include a new initiative – European Integration of the Financial Sector, which encompasses measures to deepen cooperation with EU institutions, fulfill program documents, participate in the negotiation process, and implement EU acquis in line with the European Commission’s recommendations following the screening.
Second, amendments to the Lending Development Strategy were approved to align it with the legislative roadmap under the Ukraine Facility program, particularly in the area of development and functioning of the nonperforming loans (NPLs) market and attracting foreign investment to this market.
Third, the FSC reviewed and adopted as a starting point the concept note for developing a Mortgage Development Strategy and tasked the Financial Development Working Group (Committee) under the FSC with preparing coordinated materials for further discussion, including with IMF experts.
The approved documents – including the updated Strategy for the Strategy of Ukrainian Financial Sector Development and the Lending Development Strategy – will be published separately following formal approval.
The following co-chairs and members of the FSC participated in the meeting: NBU Governor Andriy Pyshnyy, Minister of Finance of Ukraine Sergii Marchenko, NBU First Deputy Governor Kateryna Rozhkova, First Vice Prime Minister and Minister of Economy of Ukraine Yuliia Svyrydenko, Deputy Head of the Office of the President of Ukraine Iryna Mudra, NBU Deputy Governor Dmytro Oliinyk, Deputy Minister of Finance of Ukraine for European Integration Yuriy Draganchuk, Managing Director of the Deposit Guarantee Fund Olga Bilay, and other top officials of institutions comprising the FSC.
The FSC was established by presidential decree in March 2015 and provides a forum for the professional discussion of systemic risks to financial stability of the state.