2 Minutes by Reuters Staff Read this article (adds details) KYIV, Ukraine, 30 June (Reuters) – On Wednesday, Ukrainian lawmakers passed modifications to legislation aimed at strengthening the central bank’s independence and expanding its regulatory powers. The bill requires the government to seek more loans from the International Monetary Fund under a $5 billion scheme, but it must be signed by the president before it can take effect. Concerns about central bank independence and the government’s efforts to combat corruption hindered the IMF program, which Ukraine obtained last year, after the bank’s governor quit due to political pressure and the constitutional court invalidated some anti-corruption measures. Government members with an advisory vote are not allowed to attend meetings of the central bank board under the new banking bill. It brings the total number of deputy heads up to six from the current five. The bill also establishes specific rules for commercial bank supervisory boards and gives the central bank greater authority over the operations, reputation, and financial health of banks’ principal owners, linked parties, and top executives. If members of bank supervisory boards and top executives are not capable of ensuring financial stability, the central bank will obtain the authority to demand their replacement. In the years 2015-2017, Ukraine closed two-thirds of banks that had gone bankrupt due to hazardous non-transparent lending. The government also nationalized PrivatBank, the country’s largest lender, which had a $5.5 billion capital shortfall. (Natalia Zinets contributed reporting, and Toby Chopra edited the piece.) Continue reading
