10:30 14.12.2016

NBU points out short-term risk of non-observing capitalization program by some large banks

2 min read
NBU points out short-term risk of non-observing capitalization program by some large banks

The National Bank of Ukraine (NBU) has said that among short-term risks for financial stability is the probable non-observation of the capitalization program by some large banks after stress tests.

"If the risks were seen, it would require urgent coordinated steps by the NBU and the government. Solving the problems of capital shortage at large banks is required to provide for stability of the financial sector in the long-term outlook," the central bank said in a second report on financial stability published on Tuesday.

The likelihood of escalation of Russian aggression in eastern Ukraine, the low pace of structural reforms in Ukraine, the slow in growth of economies of Ukraine's trade partners and a delay in cooperation with international financial institutions (IFIs), first of all with the International Monetary Fund (IMF) remain the key risks for medium-term outlook.

As for the risk of escalation of Russian aggression in eastern Ukraine the NBU also pointed out the loss of the position in the conflict in Donbas due to the arrival of politicians who support lifting sanctions from Russia to power.

The NBU said that cooperation with the IMF is a crucially important precondition for Ukraine's financial stability. The full implementation of the IMF program must be the key task for all branches of power.

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