12:35 03.12.2018

NBU approves strategy for detecting, responding to systemic risks in financial sector

2 min read
NBU approves strategy for detecting, responding to systemic risks in financial sector

The National Bank of Ukraine (NBU) has approved a strategy of macroprudential policy, where the central bank determined the rules of detecting the accumulation of systemic risks in the financial sector and responding to them if they are implemented.

The respective document has been posted on the website of the NBU.

"The document describes in details what and how the National Bank will implement to ensure the financial stability required for sustainable economic growth. The strategy lays the foundation for the introduction of a systemic macroprudential policy in Ukraine, and also introduces it to the public, thus ensuring the transparency of the policy, its comprehensibility and greater efficiency in achieving financial stability," the central bank said on its website.

The NBU reminded that the promotion of financial stability is the second priority (after ensuring price stability) function of the central bank. It is outlined in the law on the National Bank of Ukraine. Accordingly, the NBU will be responsible for the implementation of macroprudential policies on a par with monetary policies aimed at achieving and maintaining low inflation, as well as microprudential (supervisory) policies focused on ensuring the sustainability of individual banks and protecting their depositors.

"Unlike banking supervision, macroprudential policy tools applied to the financial system in general or to individual groups of its participants," the central bank said.

At the same time, the National Bank said that financial stability depends not only on banks, but also on nonbank financial institutions. Accordingly, for the timely identification of systemic risks and the response to them, the NBU will coordinate its actions with other regulators of the financial sector, in particular, through an interdepartmental body - the Financial Stability Council.

"The implementation of a macroprudential policy by the National Bank will contribute not only to the stability of the financial system, but also will strengthen confidence in banks and support further macroeconomic stabilization. In the long term, it will ensure stable economic growth resistant to shocks and crises," NBU Governor Yakiv Smolii said.

According to the central bank, the ultimate goal of macroprudential policies is to ensure financial stability by increasing the stability of the financial system and preventing the accumulation of systemic risks. It is achieved through the implementation of interim objectives, taking into account the recommendations of the European Systemic Risk Board and the peculiarities of the Ukrainian financial system.

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