Deputy Minister of Finance Artem Shevalev reports on key objectives of the State-Owned Banks Reforms Strategy

2/16/16

On February 15, deputy Minister of Finance Artem Shevalev and Yuriy Blashchuk, the advisor of the Minister of Finance on banking issues, hosted a press conference on the reform strategy for state-owned banks which had been elaborated by the Ministry of Finance and approved by the Cabinet of Ministers.

The Ministry of Finance is continuing to take steps to recover the banking system of Ukraine and has elaborated strategy aimed to radically transform principles and mechanisms of corporate governance at state-owned banks and to build up a management system for state-owned banks which shall be exempt from political influence. The new corporate governance system at the state-owned banks shall secure transparency for potential investors and contribute to the overall stability of the state-owned banking sector.

Deputy Minister of Finance Artem Shevalev noted that the Ukrainian banking sector must become reliable for citizens and attractive for investors – that is why the proposed corporate governance system is based on international best practices and recommendations. «The corporate governance system must be in line with the recommendations of the OECD. This means we must have more effectiveness in the decision-making process taking into account the interests of the state and tax payers. This also means that the management of the state-owned banks must be free from political and administrative influence», the deputy Minister of Finance said.

The implementation of the development strategy of the state-owned banks shall help them become profitable meaning they will not need additional funding from the state budget. Second, it should make cooperation with the state-owned banks beneficial for citizens as well as for international investors.
«International experience makes it clear that private owners are normally more effective compared to the state. This also concerns developed Western nations. This is why we can only find a handful of cases where the state owns 100% of banks’ capital and acts as an effective manager», Artem Shevalev said.

Yuriy Blashchuk, the advisor of the Minister of Finance on banking issues, noted that the key changes proposed in the Strategy aim to create an independent management system for the banks remaining in state property, in order to avoid political or administrative interventions in their operation. He also said that it is crucial to engage solid international players into the reform of the state-owned banks at the very beginning of the process. «They should help us speed up in taking over best international corporate governance practices», the Minister’s advisor emphasized.

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