Economy 2021-07-15T07:18:19+03:00
Ukrainian news
IMF, World Bank, EBRD Call For Prosecution Of Ex-Owners Of Bankrupt Banks

IMF, World Bank, EBRD Call For Prosecution Of Ex-Owners Of Bankrupt Banks

IMF, EBRD, NBU, World Bank, bank

The International Monetary Fund, the World Bank, and the European Bank for Reconstruction and Development (EBRD) have called for prosecution of former owners of bankrupt banks for the losses of their banks.

The IMF, the World Bank, and the EBRD made the call in a joint letter to Minister of Finance Oleksandr Danyliuk and the National Bank of Ukraine's acting head Yakov Smolii, the text of which the Ukrainian News Agency obtained.

The joint letter was signed by the IMF mission to Ukraine's head Ron van Rooden, the World Bank's Country Director for Belarus, Moldova, and Ukraine Satu Kahkonen, and the EBRD's Managing Director for Eastern Europe and the Caucasus Francis Malige.

They called on the National Bank of Ukraine and the Ministry of Finance to continue their efforts to minimize the cost of the banking crisis to Ukrainian taxpayers.

"The cost of bank bankruptcies to taxpayers since 2014 amounts to more than UAH 215 billion, of which UAH 155 billion (about 7.5% of Ukraine's GDP in 2017) was spent on the nationalization of PrivatBank. This is the same amount that the government spent on education and medicine last year," the letter states.

The international financial institutions expressed support for the Ukrainian authorities' efforts aimed at minimizing the cost of bank failures to taxpayers.

They recommended that the Ministry of Finance and the National Bank of Ukraine adopt the following principles: conversion of related parties' liabilities into capital (bail in); repayment of non-performing loans through the "collection" legal procedure; recovery of loan collateral; bringing former owners of bankrupt banks to account for their banks' losses.

In addition, the IMF, the World Bank, and the EBRD called on all branches of the executive government and law enforcement agencies to carefully coordinate their efforts to reduce the cost of bank failures as much as possible.

As Ukrainian News Agency earlier reported, the Kroll international company's report on fraud at PrivatBank before its nationalization was published on the website of the National Bank of Ukraine on January 16.

The company's experts estimate the bank's losses at USD 5.5 billion.

However, PrivatBank's former co-owner Ihor Kolomoiskyi has expressed extreme outrage at the National Bank of Ukraine's claims of systematic fraud in the financial institution before its nationalization.

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