REUTERS
The National Bank of Ukraine (NBU) says Ukraine needs to adopt laws for the effective operation of the banking sector, finalize and introduce the strategy of state-owned banks' development, improve the management of local communities' funds, and enhance cyber security – these measures are supposed to help the country support its financial stability, according to the guidelines of the NBU Financial Stability Report, published on December 18, 2017.
As part of the legislation needed for the banking sector, the NBU listed the bill on debtors' bankruptcy procedure, the restructuring of foreign currency mortgage loans issued to individuals, the management of bad debts, and the consolidation of the state regulation of financial markets functions (the so-called Draft Law on the Split of Functions Performed by the National Commission for the State Regulation of Financial Services Markets).
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The regulator says the improvement of the management of local communities' funds in the single account at Ukraine's State Treasury Service and banks will help avoid large annual payments in December, which creates risks for the currency market and the banking sector's liquidity.
The NBU also recalled that in the last year and a half, there had been several large-scale cyber attacks that led to a complete temporary shutdown of the information systems at several banks, enterprises and government agencies. In this regard, the rules of information security should be revised in both the public and private sectors.
As UNIAN reported earlier, the year 2017 was successful for the banking system, while the overall level of systemic risks of the banking sector was low, according to the NBU estimates. At the same time, the slow structural changes in the economy, the low efficiency of state-owned banks and the weakness of the legal system remain significant obstacles to the development of the sector.
According to the NBU, a key macroeconomic risk for financial stability in the coming years is the possible termination of cooperation with the International Monetary Fund, as it will be difficult for Ukraine to refinance over US$20 billion in bonds maturing in 2018-2020 without the IMF's support.
The regulator also urged to begin negotiations on the launch of a new program of cooperation with the IMF in 2018, as the current one is expiring in early 2019.