Ministry of Finance: Financial stability council approves amendments to Ukraine’s financial sector development strategy

The Financial Stability Council (FSC) held a meeting on 13 May, focusing on preparations for the eighth review of the International Monetary Fund’s Extended Fund Facility programme and adopting several decisions.

Firstly, the FSC approved amendments to the Financial Sector Development Strategy of Ukraine, including:

• New measures related to the legislative regulation of the Entrepreneurship Development Fund, the development of a mortgage lending strategy, enhancing the resilience of critical infrastructure, and improving the digital operational resilience of the financial sector.
• Updates to measures for developing capital market infrastructure, particularly aligning the target model for market operations with stakeholders, including consolidating accounting infrastructure and attracting foreign investors, and implementing these changes. These amendments aim to reform the market and maximise opportunities for attracting private investment.
• Expanding the scope of Goal III, “The financial system operates for the country’s recovery and integration into the EU,” and adding a new initiative, “European integration of the financial sector.” This includes measures to deepen cooperation with EU institutions, implement programme documents, participate in the negotiation process, and enact EU legal acts, taking into account the European Commission’s recommendations following the screening process.

Secondly, amendments to the Credit Development Strategy were approved to align it with legislative changes under the Ukraine Facility programme, specifically regarding the development and functioning of the non-performing loans (NPL) market and attracting foreign investment to this market.

Thirdly, the FSC reviewed and adopted as a basis the concept for developing a Mortgage Development Strategy, tasking the Financial Development Committee under the FSC with preparing coordinated materials for further discussion, including with IMF experts.

The approved documents, including the updated Financial Sector Development Strategy and the Credit Development Strategy, will be published separately following final approval.

Background

The meeting was attended by the FSC co-chairs and members, including First Deputy Prime Minister and Minister of Economy Yuliia Svyrydenko, Minister of Finance Sergii Marchenko, Governor of the National Bank of Ukraine Andriy Pyshnyy, Deputy Minister of Finance for European Integration Yuriy Draganchuk, First Deputy Governor of the NBU Kateryna Rozhkova, Deputy Head of the Office of the President of Ukraine Iryna Mudra, Deputy Governor of the NBU Dmytro Oliinyk, Managing Director of the Deposit Guarantee Fund Olha Bilay, and other heads of FSC member institutions.

The Financial Stability Council was established in March 2015 by a Presidential Decree and serves as a forum for professional discussion of systemic risks threatening the state’s financial stability.