The National Bank of Ukraine (NBU), jointly with the Finance Ministry of Ukraine, the National Commission for Securities and the Stock Market of Ukraine, and the European Bank for Reconstruction and Development (EBRD) on July 15 signed a memorandum of cooperation to develop local capital markets in Ukraine, the NBU said on its website.

"The main goal of the memo is increasing cooperation and dialog between Ukraine and the EBRD to develop an effective local capital market in Ukraine, which, in turn, would first promote the attraction of foreign investment," the NBU said.

According to the memorandum, the key areas of cooperation are the renewal of the assessment of the needs of the Ukrainian capital market conducted by the EBRD in 2011, the promotion of the effective mobilization of capital in the Ukrainian economy, support for the development and improvement of clearing and depository infrastructure, and new capital market instruments as an alternative to the banking sector, including securitization and secured bonds.

The memo also foresees defining a strategy for promoting liquidity and trade with capital market tools, including the analysis of issue processes and building a yield curve, providing further aid in drawing up the legal base for the derivative market, boosting the potential of the regulatory and judicial institutions and market players, and supporting the development of the legal base with the objective of the issue of bonds by international financial organizations, in particular, the EBRD.

Deputy NBU Governor Oleh Churiy said that this document opens up additional opportunities for developing local capital markets and it would allow for receiving support and accompanying of the EBRD's transactions, methodological aid and technical cooperation.

"The NBU welcomes the signing of the memo and the efforts of the EBRD aimed at supporting the development of capital markets in Ukraine. This is one of the top priorities for us in reforming the financial sector of the country, which is corroborated by the comprehensive program on developing the Ukrainian financial sector until 2020," Churiy said.

In 2010, the EBRD launched the Local Currency and Capital Markets Initiative which aims to enhance the macroeconomic, regulatory and market framework to ensure long-term, sustainable and liquid local currency markets.