Ukraine has lan to save banks

18:28, 04 November 2008
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Banks will be bought out by the government?

The Ukrainian Cabinet of Ministers has approved a procedure to recapitalize Ukrainian banks, UNIAN news agency reports, citing the country’s finance minister, Viktor Pinzenik. Banks will be bought out by the government through a system of domestic government loans. The government will enter into the authorized capital of the banks through that instrument, then the National Bank of Ukraine will buy the loans.

According to Pinzenik, those measures are needed to save the country’s banking system, which is suffering from the effects of the world financial crisis. He added that those steps were taken in order to preserve the bank as a financial institution, and not to save “the property of shareholders.”

Ukraine has received a two-year, $16.5-billion stabilization credit from International Monetary Fund, and it is possible that it has had to carry out reforms according to an IMF plan. The United States, European Union, Russia and a number of other countries have instituted bank aid programs in connection with the financial crisis.


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