Ukraine has promised the International Monetary Fund (IMF) to abandon the creation of a bailout bank in favor of the so-called bridge bank, or a transition bank, reads a memorandum signed by the Ukrainian authorities and the IMF.
The creation of the bridge bank foresees that healthy assets and liabilities will be transferred to the new bank, while distressed assets and liabilities will remain in the old bank. The bank will continue to work to improve its financial condition (during the search for a buyer), while overcoming temporary financial problems.
The Ukrainian authorities also pledged to the International Monetary Fund to strengthen the country's banking system. In particular, Ukraine should take measures on the legislative improvement of banking regulation and supervision, as well as information disclosure systems about the final owners of banks.
The National Bank of Ukraine (NBU) pledged to increase the level of its openness with the advance notification about board meetings that will address issues of interest rate policy.
The NBU earlier proposed allocating UAH 10 billion (UAH 7.89 / USD 1) for the creation of a bailout bank. It was expected that the financial institution would buy the distressed assets of commercial banks that would help improve their balance sheets, expanding the possibility of lending.
The creation of the bridge bank foresees that healthy assets and liabilities will be transferred to the new bank, while distressed assets and liabilities will remain in the old bank. The bank will continue to work to improve its financial condition (during the search for a buyer), while overcoming temporary financial problems.
The Ukrainian authorities also pledged to the International Monetary Fund to strengthen the country's banking system. In particular, Ukraine should take measures on the legislative improvement of banking regulation and supervision, as well as information disclosure systems about the final owners of banks.
The National Bank of Ukraine (NBU) pledged to increase the level of its openness with the advance notification about board meetings that will address issues of interest rate policy.
The NBU earlier proposed allocating UAH 10 billion (UAH 7.89 / USD 1) for the creation of a bailout bank. It was expected that the financial institution would buy the distressed assets of commercial banks that would help improve their balance sheets, expanding the possibility of lending.
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