Panel Discussion “Non-Performing Loans as Obstacles Hampering Sustainable Development of Ukraine’s Economy”
13.30 – 14.00 Welcome coffee
14.00 – 15.15 Panel Discussion
Key Speaker:
Mr. Masaaki Shirakawa is a Japanese central banker and an academician who had an amazing opportunity to embed his academic vision into development and implementation of state economic policies in Japan. Having been the Governor of the Bank of Japan for over 5 years, his professional achievements brought him to the 6th world’s most powerful central banker by Newsweek ranking along with FRB’s Mr. Ben Bernanke and ECB’s Mr. Jean-Claude Trichet back in 2008.
Panel Participants:
- Mr. Vitaliy Vavryschuk, Head of Financial Stability Department, National Bank of Ukraine
- Mr Eran Klein, the Member of the Privatbank Supervisory Board
- Mr Yuriy Butsa, Supervisory Board member, Ukreximbank and Commissioner of Public Debt Management
- Mr. Dmytro Oliynyk, Head of Department of Financial Policy, Ministry of Finance of Ukraine
- Mr. Oleksii Sobolev, Chief Executive Officer, ProZorro.Sale
- Dr. Olesia Verchenko, VP for Economics Education, Kyiv School of Economics
Description:
Ukraine’s state-owned banks (SOBs) have accumulated a large portfolio of non-performing loans (NPLs) which amounts to about UAH 400 billion accounting for 67% of all NPLs in Ukraine’s banking system; more than 90% of SOBs’ NPLs come from the corporate segment;
The state has considered various mechanisms to deal with NPLs, taking into account the best international practices. According to Principles of State-owned Banks Sector Strategic Reform (SOB Strategy), in the short term, the state’s optimal decision is to ensure an adequate balance between the efficiency and the possibility of introducing mechanisms designed to deal with corporate segment NPLs. As of now NPLs remain on the balance sheet of individual SOBs and continue being financed by the budget. The Special Independent Committee on NPL was introduced under the Financial Stability Council and leadership of the National Bank of Ukraine (NBU) and the Ministry of Finance of Ukraine (Minfin) was called to make key decisions as regards dealing with NPLs of SOBs. However, the mandate of the Committee is advisory and does not have the legal enforcement.
In the medium-term, the state will consider other approaches to deal with NPLs, including the establishment of a state-owned asset management company. Nevertheless, such decision has not been yet made. Some SOBs intend to exercise the mechanism of time-consuming financial restructuring until NPLs turn performing. Current legislation allows lengthy and costly procedure of financial restructuring and is deemed to be a virtual “financial rescheduling”.
Key question to be answered:
Is Ukraine seeking a non-universal mechanism of successful NPL resolution?
What are the obstacles that prevent introduction of the most efficient practical universal mechanism of successful NPL?
Key aspects to be discussed at the seminar:
NPLs, toxic portfolio, SOBs, Principles of SOBs Sector Strategic Reform (SOB Strategy), independent Supervisory Boards, write off, bad bank concept, asset resolution company, forgiveness of debts.
Simultaneous translation provided (English-Ukrainian)
The event is supported by Swedish government within the project “Economic and Financial Reform Support in Ukraine”.
