The market share of state-owned banks has been constantly growing since 2014 when a so-called banking sector cleanup started. After PrivatBank was nationalised, the government’s share exceeded 50%. How should we view this, what will it result in, and what can the state actually do about PrivatBank? Mykhaylo Demkiv, a financial analyst at the ICU, sums up the situation.
Category: Financial System
Ukraine’s improving economic situation creates a feeling of no urgency in further IMF financing. This view is not justified if one looks at the three-year horizon. Ukraine faces $14bn of external debt payments over the next three years, with half of them in 2019 – a year of presidential and parliamentary elections. Foreign currency reserves that the country has accumulated have to be built up further, rather than spent. Otherwise, Ukraine’s economy may appear on the brink of another economic crisis right before the election year, which may have a dramatic effect on the country’s development trajectory post-2019.
Ukrainian Prime Minister Volodymyr Groysman surprised everyone with an initiative to double the minimum wage – up to 3200 UAH – in 2017. It is quite difficult to assess this decision because the minimum wage in Ukraine influences numerous indicators and sectors of the economy. It would be irresponsible to make any conclusions without detailed calculations. The views of modern economists on the idea of minimum wage range from enthusiastic approval to sharp criticism. VoxUkraine has studied the history of the concept of the minimum wage.
The Ukrainian economy is highly dollarized, which complicates the monetary policy and decreases the amount of resources available for investment. In 2014-2015, due to the inflation spike and the devaluation of hryvnia, the demand for foreign currency was bound to increase. However, according to the official data, Ukrainians decreased the foreign currency purchases by 15-20 times. It shows that foreign exchange transactions have mostly shifted to a “blind spot” for the regulator and official statistics. This happened due to the rapid development of black market after the National Bank of Ukraine introduced severe foreign exchange controls. We have tried to assess the size of the black market in foreign exchange in Ukraine and to determine to what extent Ukrainians use foreign currency. Full text is available in Ukrainian and Russian.
Since the Revolution of Dignity, the President’s Office, the National Bank of Ukraine, the Parliament, and the various administrative bodies have begun a wide-ranging program of reform. Which governmental actions have proven to be good for Ukraine’s economy, and which have taken Ukraine in the wrong direction? Tetyana Tyshchuk and Oleksiy Hrybanovsky closely studied the Index for Monitoring Reforms in order to find out which government agencies are true to their word.
There is a continuing struggle between those who are striving to hide money and assets and those who are trying to find them. Central banks are one of the key players in the fight against money laundering (anti-money laundering), against the concealment of “gray” transactions (related-party lending), and against the concealment of property rights (ultimate beneficial ownership). These are the non-trivial tasks which require a comprehensive analysis. In this article, we provide a detailed analysis of the entire network of owners of Ukrainian banks. Full text is available in Ukrainian and Russian.
Volatility of capital flows is a big challenge especially for transition economies that don’t have very well developed financial architecture. What are the priorities for capital account liberalization in Ukraine and how the experience of other countries can be used for that – this, among other topics, was the focus of the NBU conference, held in Kyiv on May 19-20.
Over the past decades, with the development of the banking systems, the ways that banks compete has changed dramatically. Nowadays, banks compete not only through price but also through geographic presence. That is, banks diversify their branches in different markets to raise the awareness of customers about the banks and services. As the number of geographically diversified banks has increased, the number of markets in which banks coincide has also increased.
The theme of this paper is very close to the main issue central bankers are concerned with, which is keeping inflation low, predictable and stable. Central bankers are aware that stabilizing inflation often comes at the cost of destabilizing output and employment. These relationships are often referred to as the Philips curve.