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Storm clouds are gathering

Not a private storm

Why is the loss of independence of the National Bank an issue that concerns everyone? What threats could become reality because of pressure on the central bank of the country, which has been increasing since 18 April this year?
After the Revolution of Dignity, Ukraine went through the perfect storm of three-way crisis, economic, banking and currency. It looked as though this was a thing of the past for Ukraine, but today we are hearing the thunder of politicians' populism and pressure from the oligarchs again, we are seeing flashes of lightning in the form of groundless lawsuits and decisions.
Storm clouds are gathering around the National Bank, which is at risk of losing its independence under pressure, and with it - and the ability to ensure price and financial stability. This is not a private storm affecting one institution, just like the National Bank is not a private bank, but an institution working for the prosperity of every Ukrainian.
We are just a bellwether, and pressure on the National Bank is a severe weather warning for the whole of Ukraine, which could find itself flooded by a new financial and economic crisis as a result.

Threats

to NBU independence

23 august 2019
{{ counters.n4 }} Political
declarations
{{ counters.n2 }} Oligarch
declarations
{{ counters.n3 }} Court
decisions
{{ counters.n1 }} Lawsuits

Independence

An independent central
bank means

  • BANKS
    Protection of bank depositors,
    a more reliable and effective
    banking system, growth
    in lending.
  • FOREIGN EXCHANGE
    Continued
    FX liberalisation.
  • JOBS
    Enabling stable economic growth,
    ability to protect the country from
    crisis impacts, business growth.
  • INTERNATIONAL PERCEPTION
    A positive image of Ukraine on
    the international stage and the trust
    of foreign partners.
  • PRICES
    A low and stable rate
    of inflation.
  • CURRENCY
    Stability in the currency market.

Independence

If central bank independence
were lost under pressure

  • BANKS
    Depositors losing their savings,
    return of “hoover”-style and other
    banks that break the law, more
    loans not being repaid.
  • FOREIGN EXCHANGE
    FX liberalisation cut short, repressive
    FX measures return.
  • JOBS
    Crisis, impossibility of ensuring long-term
    economic growth resistant to crises,
    increase in unemployment.
  • INTERNATIONAL PERCEPTION
    Distrust of international partners,
    loss of Ukraine’s positive image
    on the international stage.
  • PRICES
    Rising inflation.
  • CURRENCY
    Risk of exchange rate
    fluctuations.
Scroll up and down

Independence

An independent central
bank means

  • BANKS
    Protection of bank depositors, a more reliable
    and effective banking system, growth
    in lending.
  • JOBS
    Enabling stable economic growth,
    ability to protect the country from
    crisis impacts, business growth.
  • FOREIGN EXCHANGE
    Continued FX liberalisation.

  • INTERNATIONAL PERCEPTION
    A positive image of Ukraine on
    the international stage and the trust
    of foreign partners.
  • PRICES
    A low and stable rate of inflation.
  • CURRENCY
    Stability in the currency market.

Independence

If central bank independence
were lost under pressure

  • BANKS
    Depositors losing their savings, return of
    “hoover”-style and other banks that break the law,
    more loans not being repaid.
  • JOBS
    Crisis, impossibility of ensuring long-term
    economic growth resistant to crises,
    increase in unemployment.
  • FOREIGN EXCHANGE
    FX liberalisation cut short, repressive
    FX measures return.
  • INTERNATIONAL PERCEPTION
    Distrust of international partners,
    loss of Ukraine’s positive image
    on the international stage.
  • PRICES
    Rising inflation.
  • CURRENCY
    Risk of exchange rate fluctuations.

Severe weather

warning

Scroll through the centre
All
Lawsuits
Oligarch declarations
Court decisions
Political declarations
Storm clouds
gathering
Getting our
parasols ready
12.07.2019
Zelenskyy Suggests Vetting the NBU Governor
06.07.2019
Tymoshenko: NBU’s Policy and Leadership Must Change Now
03.07.2019
Baryshivka District Court of Kyiv Oblast to Hear Rozhkova’s Dismissal Case on 22 July
18.06.2019
Kolomoisky tries to stop the proceedings initiated by the NBU in Switzerland
13.06.2019
Baryshevsky District Court bans Rozhkova from performing her official duties
31.05.2019
NBU: Kolomoisky again tries to block the claim of the NBU in Switzerland with the help of Ukrainian courts
30.05.2019
SBI conducts investigation of the NBU regarding financial monitoring, supervision of banks, and sale of loans
29.05.2019
MP asks the District Administrative Court of Kiev to ban Kateryna Rozhkova from performing the official duties of NBU First Deputy Governor
29.05.2019
The NBU will appeal against the decision of the District Administrative Court of Kyiv regarding the illegality of the exclusion of PriceWaterhouseCoopers from the Register of Bank Auditors
26.05.2019
Kolomoisky: Ukraine should default
23.05.2019
Bakhmatyuk has accused the NBU of illegally liquidating the bank "Financial Initiative"
23.05.2019
Kolomoisky wants to become a co-owner of PrivatBank with the state
21.05.2019
Tymoshenko: President has grounds to raise the issue of changing the National Bank Governor
20.05.2019
The Commercial Court postpones case on Kolomoisky's debts to the NBU; disregards all the petitions of the regulator
19.05.2019
MPs turn to NABU to demand criminal proceedings against Gontareva
17.05.2019
Proposal on the removal of Smolii registered in Parliament
16.05.2019
Volodymyr Zelensky promises to lower key policy rate
16.05.2019
Zhevago accuses Ministry of Finance and NBU of falsifying GDP growth statistics
16.05.2019
Bahmatyuk: Gontrareva caused greater losses than Putin to Ukraine’s economy
16.05.2019
Zhevago: NBU removed 90 banks from the market on its own initiative
16.05.2019
Bahmatyuk: unprofessionalism of NBU management is the reason for slow economic growth
15.05.2019
Zelensky’s team explain how compensation could be paid over PrivatBank: “Kolomoisky would still owe money”
13.05.2019
Court dismisses NBU appeal: rules in favour of PrivatBank former owners
13.05.2019
The Privatbank case: Prosecutor General’s Office begins investigating ‘pressure’ on judges
10.05.2019
Kolomoisky speaks out about NBU staff changes
10.05.2019
Court brings five claims by Kolomoisky against the NBU together into one
07.05.2019
Court refuses PrivatBank’s application to dismiss claim on sale of shares to Ministry of Finance
06.05.2019
NBU fails to remove freezing of Kolomoisky’s assets
02.05.2019
Kolomoisky wants to get back Dnipro real estate, given to the NBU by the courts
02.05.2019
Kolomoisky sets out key objectives in relation to PrivatBank
02.05.2019
Kolomoisky: If necessary, we will bring Gontareva to Ukraine
25.04.2019
Kolomoisky files five new claims against NBU
23.04.2019
Judges who took the decision on cancelling the nationalisation of PrivatBank say officials put pressure on them
23.04.2019
Top manager dismissed from NBU asks court to remove Rozhkova and Borisenko
21.04.2019
In response to a request by Kolomoisky, court cancels his guarantee agreement for PrivatBank refinancing loans
19.04.2019
Court upholds another decision regarding PrivatBank in Kolomoisky’s favour
19.04.2019
Bahmatyuk names Gontareva as the other threat to Ukraine’s economy after Russian aggression
18.04.2019
Court cancels decision on PrivatBank nationalisation. What Kolomoisky was after
18.04.2019
Kolomoisky on the reason behind PrivatBank’s nationalisation: Poroshenko wanted 1+1
13.04.2019
Zelensky HQ says NBU audit is required
08.04.2019
Kolomoisky wants $2bn for Privatbank
30.07.2019
President's Office made known its support for NBU independence
25.07.2019
Kateryna Rozhkova: If look to the Baryshev court system, you'll sell flowers on the streets instead of working at the NBU
18.07.2019
The Supreme Court did not allow Kolomoisky companies to avoid liability to the National Bank
18.07.2019
Court decision on Unison Bank liquidation does not eliminate decision on its insolvency
12.07.2019
G7 ambassadors criticized Zelensky's idea of a new lustration
11.07.2019
Court Opens Proceedings in NBU’s Lawsuit to Collect UAH 5 Billion from Kolomoisky
08.07.2019
Kateryna Rozhkova Comments on Lawsuit Filed against Her with Baryshivka District Court of Kyiv Oblast
05.07.2019
Kateryna Rozhkova on PrivatBank: We All Strived to Avoid Nationalization
03.07.2019
Baryshivka District Court of Kyiv Oblast to Hear Rozhkova’s Dismissal Case on 22 July
02.07.2019
Zelenskyy Meets with Lagarde’s Deputy, Says Ukraine Wants to Keep Up IMF Cooperation
19.06.2019
NBU appeals against court decision on PrivatBank inspection prior to nationalisation being unlawful
18.06.2019
The NBU provided the Swiss court with evidence on Kolomoisky's attempt to stop the proceedings and evade refinancing loans obligations
14.06.2019
NBU files its appeal against court ban on Rozhkova's performance of her official duties
13.06.2019
NBU files Supreme Council of Justice complaint against judges in Privatbank nationalisation case
13.06.2019
Comment from the NBU after another attempt to prohibit Kateryna Roshova from performing her official duties
12.06.2019
The Supreme Court refused to oblige Privatbank to return NBU refinancing
11.06.2019
Rozhkova: Court claims are undermining the independence of the NBU
11.06.2019
Default announcement will discourage foreign investors from investing in Ukraine
11.06.2019
Rozhkova on PrivatBank nationalisatino abolition: This is the "red line for the IMF"
04.06.2019
Zelensky: Rumors about a default in Ukraine have nothing to do with my position
04.06.2019
Zelensky: I'm not going to be on the side of the ex-owners of PrivatBank
03.06.2019
Court has not considered if PrivatBank audit report prepared by PricewaterhouseCoopers was IFRS-compliant
31.05.2019
National Bank urges media to refrain from accusing NBU employees of abusing the court decision
31.05.2019
The National Bank refutes claims of inefficiency of use of funds in 2017
31.05.2019
The National Bank legally gets rid of the non-core function of lending to employees and supporting their loans
30.05.2019
The Supreme Court confirmed the groundlessness of the claims of the shareholder of Omega Bank Laguna MI against the NBU
29.05.2019
Comment from the National Bank regarding court intentions to ban Kateryna Rozhkova from performing official duties
29.05.2019
NBU Governor Yakiv Smolii did not pressurise judges during NSDC speech, experts rule
28.05.2019
PrivatBank appealed against court decision on the unlawfulness of nationalization
24.05.2019
National Bank appealed against both decisions of the District Administrative Court of Kyiv regarding the illegality of privatization of PrivatBank
24.05.2019
US embassy: Good corporate governance has made PrivatBank profitable
23.05.2019
The head of the NBU Smolii is not going to resign
23.05.2019
The head of the National Bank has an account on Twitter
23.05.2019
Smolii explained why open communication is a priority for the NBU
23.05.2019
NBU has rightfully withdrawn a banking license at PJSC "CB" Financial Initiative
22.05.2019
The Supreme Court reinstated the recognition of legal insolvency of the bank Khreshchatyk
21.05.2019
The Supreme Court supported the NBU in a dispute with Kolomoisky regarding loans refinancing Privatbank
21.05.2019
Sologub explained why the independence of the NBU is important
20.05.2019
The Cabinet appealed the decision to cancel the nationalization of PrivatBank
17.05.2019
Miklosh: Compensation to Kolomoisky for PrivatBank will be a signal to the world that courts and common sense do not work in Ukraine
16.05.2019
Ukraine could nationalise PrivatBank again if needed
15.05.2019
Appeal Court denies claim on dismissal of Rozhkova and Borisenko
14.05.2019
Ministry of Justice clarifies ‘pressure on judges’ in connection with PrivatBank
14.05.2019
Zelensky considers ensuring macroeconomic stability through NBU independence and IMF cooperation a priority
13.05.2019
NBU will file cassation appeal over court decision to cancel inspection conducted at PrivatBank before nationalisation
06.05.2019
NBU says it is a secured PrivatBank creditor regardless of court decision
03.05.2019
Statement by the IMF Managing Director on her Telephone Call with the President of Ukraine Petro Poroshenko
03.05.2019
G7 Ambassadors and NBU Board discuss potential macrofinancial stability risks and NBU priorities
26.04.2019
Kateryna Rozhkova: “Putting pressure on the National Bank is the same as shooting yourself in the foot”
25.04.2019
NBU fears loss of independence
24.04.2019
Privatbank case interference would hurt Ukraine's credit rating: Moody's
22.04.2019
National Bank to appeal court decision on terminating I. Kolomoisky’s personal guarantee agreements
19.04.2019
Financial Stability Board notes the uninterrupted work of PrivatBank and the financial sector; the parties will continue to defend the interests of the state through the courts
19.04.2019
NBU appeals the court decision to discontinue the list of persons associated with PrivatBank
19.04.2019
IMF: PrivatBank nationalisation protected depositors
19.04.2019
Statement by French Ambassador Isabelle Dumont
18.04.2019
Joint statement by the Ministry of Finance of Ukraine, the National Bank of Ukraine and PrivatBank
18.04.2019
National Bank comment on appealing the decision on PrivatBank nationalisation
18.04.2019
EU supports Ukraine in the PrivatBank case
18.04.2019
Statement by the World Bank
18.04.2019
Statement by the European Bank for Reconstruction and Development
18.04.2019
Statement by the US Embassy in Ukraine
18.04.2019
National Security and Defense Council of Ukraine held emergency meeting in connection with the situation around PrivatBank
All
NBU
International partners
Court decisions
Political declarations

Why this

is important

How did the NBU become independent?

The key to effectiveness for modern central banks is independence. After the Revolution of Dignity, the Verkhovna Rada strengthened the independence of the National Bank of Ukraine. Since then, it has been enshrined in the Law "On the National Bank of Ukraine".

What does NBU independence mean?

Independence of the National Bank means that NBU decision-making does not depend on the positions of politicians and government officials. For example, the National Bank does not have to get approval for decisions regulating banking market operations, issuance of money, accumulation and management of gold and foreign exchange reserves. The National Bank has also received financial independence: it should not transfer more funds than it receives as profit into the state budget. In other words, it is not obliged to "fix holes" in the budget. After all, such "fixing of holes" leads to inflation gathering pace.

What is the ultimate benefit of NBU independence?

This freedom allows the National Bank to work efficiently. For example, it is able to consistently reduce inflation, to protect the economy from crises and to ensure that banks work properly, that they are reliable, transparent and support the economy. All of this means that stability in the banking market and in the economy can be maintained, ensuring calm in the currency market without burning international reserves. This ultimately contributes to the prosperity of Ukrainians.

Who controls the NBU?

The National Bank is accountable to the public. Accountability is one of the basic principles of the NBU's work, which is enshrined in the Law "On the National Bank of Ukraine". The National Bank is a state institution and thus accountable to the public for the results of its work, which is achieved through reporting to the President of Ukraine, the Verkhovna Rada of Ukraine, including the Committee of the Verkhovna Rada of Ukraine on Finance and Banking, and the Council of the National Bank, as well as through open and transparent communications with society.
Moreover, another way NBU activities are monitored is the external audit, which the National Bank regularly passes.
The National Bank is controlled by the National Bank Council, whose members are appointed by the Verkhovna Rada of Ukraine and the President of Ukraine. Their main tasks are to develop the Fundamental Principles of Monetary Policy and to monitor monetary policy implementation.

What will happen if the NBU loses its independence?

The loss of NBU independence will mean that the National Bank becomes an instrument in the hands of politicians and businesspeople. Its work will then be focused not on ensuring price and financial stability, but on meeting the private interests of individuals at the expense of society as a whole. This could lead to higher inflation, currency market pressures and sharp jumps, the return of hoover banks and banks that break the law. Together, this can lead to a crisis spreading which will, ultimately, have a negative effect on each and every citizen and on the way Ukraine is perceived internationally.

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