Public Organization Financial Stability welcomed Decree of the President of Ukraine No 170/2015 “On the Financial Stability Board” of 24.03.2015, as it believed that establishment of such institution will give a boost to development of a number of steps required for implementation of efforts aimed at modernization of Ukraine declared at the state level, reformation of the financial market and movement towards qualitatively new social relations. In accordance with the duties imposed on it, the Financial Stability Board shall develop the state strategy and efficient mechanisms of ensuring financial stability of the state, including those related to improvement of legislative regulation in the field.
PO Financial Stability thoroughly monitored information on activities of the Financial Stability Board and hoped a lot on the dialogue among public institutions and civil society, which, in accordance with the Regulations on the Financial Stability Board, it shall provide for. However, too brief information on decisions made at meetings of the Financial Stability Board present in mass media shows that this dialogue which would be so useful for the Ukrainian society, did not become nation-wide and effective.
Some time ago Public Organization Financial Stability advanced its suggestions regarding the most optimal structure of the Financial Stability Board of Ukraine in its letter to the Head of the National Council for Reforms No 19.02.2015/1-Вих of 19.02.2015, however, our vision of the model of financial stability was not accepted. As the final composition of the Financial Stability Board did not include representatives of scientific institutions, which specialize on economic studies and forecasts, and the institution of financial ombudsman, irrespective of suggestions made by Public Organization Financial Stability, it seems that decisions made at meetings of the Financial Stability Board remain behind-the-scenes ones, narrow-focused and far from strategic ones. If decisions are made for public institutions exclusively and do not extent to the entire society, then such decisions cannot be effective.
Today we can establish with certainty:
- An overall crisis of trust of people to financial institutions
- No clear interaction between the state, financial market and people
- No strategy of overcoming financial crisis
- No consolidation of all branches of power and the Ukrainian society for development of such strategy and its further implementation
So, with the purpose of elimination of negative factors affecting the condition of the financial market of Ukraine and development of the strategy of overcoming financial crisis and further development and growth of the domestic financial market, Public Organization Financial Stability suggests adoption of Law of Ukraine “On the Financial Stability Board of Ukraine”, in which:
- the structure of the Council shall be clearly defined, and it shall provide for transparent efficient coordination of the executive power, legislative power, representatives of scientific circles and financial ombudsman (establishment of this structure in Ukraine is required for protection of interests of the financial market players, resolution of conflicts and disputes in the paradigm: the state – institutions providing financial services - consumers of financial services)
- establish the procedure of fulfillment of decisions of the Financial Stability Board and set the responsibility for failure to fulfill them.
Law of Ukraine “On the Financial Stability Board of Ukraine” is aimed to implement the model of management of financial stability in Ukraine on the basis of micro and macroprudential mechanisms, which will allow to regain trust of people and investors, and will create stimuli for economic development through involvement of officials of the National Bank of Ukraine, the Ministry of Finances of Ukraine, the national Securities and Stock Market Commission, the national Commission Performing State Regulation in Financial Services Markets, the Deposit Guarantee Fund to joint work within the structure of the Financial Stability Board, as well as carious analysts, specialists and scientific collectives of institutes and institutions, which goal of activities is analysis and forecast of financial, economic and other factors of micro and macro levels, and establishment of the office of financial ombudsman and its involvement to work in the National Council for Reforms.
The result of adoption of Law of Ukraine “On the Financial Stability Board” Public Organization Financial Stability shall be formation of a predictable financial market with clear and transparent rules, protected interests of players, attractive for both national and foreign investors within 2-3 years.
