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well as stipulates the transparent sale of assets of bankrupt entities. Alexander Paraschiy at Kyiv-based brokerage Concorde Capital believes that all the legislation's details, including its 1,000-plus amendments considered by the Rada on October 17-18, will be available once the president signs it and the final draft is published. "But if most of the clauses offered by the bill's initiators are indeed implemented, and if the bill is signed by the president, it should significantly improve the rights of creditors in Ukraine," he added in a note on October 18. "In turn, it will reduce the risks of Ukrainian banks and will stimulate their lending activity, as well as reduce the costs of lending." The new code creates the possibility for individuals to apply for financial recovery/bankruptcy procedures. It cancels the current moratorium on foreclosure of property pledged by individuals under mortgage loans. The law's authors said its adoption will result in Ukraine's dramatic improvement in the World Bank’s Doing Business rating by at least nine positions (from its 76th ranking out of 190 economies in 2018). In the ranking's Resolving Insolvency category, Ukraine should move to 68th place from its 149th ranking in 2018. The law is also part of Ukraine's commitments to the International Monetary Fund (IMF) "to strengthen the corporate insolvency regime," as was disclosed in the last memorandum signed in April 2017. Paraschiy added that full implementation of this legislation should dramatically improve the recovery rate of non-performing loans (which the World Bank estimates to be 8.9% in Ukraine now), and therefore may improve the balance sheets of many Ukrainian banks, as well as grant more chances to the Deposit Guarantee Fund (which manages the assets of about 90 failed banks) to have a higher recovery rate from the assets under its control. "All in all, the new law may indeed significantly improve the image of the Ukrainian economy and attractiveness of its financial sector," he wrote in the note.
The National Bank of Ukraine (NBU) has begun to crack down on illegal currency exchange bureaus owned by non-bank financial institutions and identified 55 illegal bureaus in January-September, the regulator said in a statement on October 18. Illegal bureaus were identified in the Kyiv, Zakarpattia, Kharkiv, Lviv, Ivano-Frankivsk, Rivne and Dnipropetrovsk regions. In 2017, the central bank revealed 115 illegal currency exchange bureaus. The regulator has conducted regular inspections of the country's financial institutions engaged in FX exchange transactions since September 2016 . The NBU passes on information about illegal FX bureaus to law enforcement agencies. According to earlier reports made by the central bank, the NBU cooperates the most efficiently with the law enforcement agencies in Kyiv and the Kyiv region that promptly notify the NBU of the measures taken to terminate the operation of such bureaus.
Ukraine still has 15 to 18 banks “whose business model we consider unviable,” Kateryna Rozhkova, first deputy governor of the National Bank of Ukraine, tells a financial conference in Kyiv. Since 2014, the central bank closed half of Ukraine’s banks. The remaining number – 80 – is considered too high for Ukraine’s $100bn economy.
49 UKRAINE Country Report November 2018 www.intellinews.com