Ukraine parliament backs bill to strengthen central bank independence
Ukrainian lawmakers on Thursday approved amendments to legislation to strengthen the independence of the central bank and expand its regulatory powers.
The bill, which was passed on a first reading and needs to
be voted on a second time to come into force, is a requirement for the
government to secure more loans from the International Monetary Fund under a $5
billion programme.
Ukraine secured the IMF deal last year to tide the country
through recession caused by the coronavirus pandemic.
But the programme stalled over concerns about central bank
independence and the government's efforts to tackle corruption, after the
bank's governor resigned complaining of political pressure and the
constitutional court overturned some anti-corruption measures.
The new banking bill excludes the possibility for government
members to attend meetings of the central bank board with an advisory vote.
It also sets clear requirements for the supervisory boards
of banks and gives the central bank more control over the activities,
reputation and financial states of banks' major owners, related parties and top
managers.
The head of the parliament committee on finance issues
Danylo Hetmantsev said that the central bank would gain the power to demand
changes of members of banks' supervisory boards and top managers "if they
do not ensure financial stability".
"The changes are aimed at strengthening the stability
of the banking system," Hetmantsev told lawmakers before the vote.
In 2015-2017, Ukraine closed two thirds of banks, which
became insolvent because of their risky non-transparent lending.
The government also nationalized the country's largest
lender PrivatBank, whose former owners and management practice created a
capital gap of more than $5.5 billion.
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