Verkhovna Rada approves new banking bailout bill

On Friday, the Verkhovna Rada passed a new banking bailout bill, which creates a legal framework for recapitalizing banks. The law also increases the state administration timeframe from six months to one year, but decreases the moratorium on the early withdrawal of deposits from six months to three months. The law prescribes creation of a sanation bank, which would take on the assets and liabilities of an insolvent bank. The law requires banks to submit information on shareholders to the public. The head of the International Monetary Fund’s mission to Ukraine, Ceyla Pazarbasioglu, according to an e-mailed statement cited by Bloomberg, welcomed Ukraine’s passage of new banking bailout bill. Pazarbasioglu said the adoption of the reforms will enhance confidence and promote sustainable development of the banking sector. Andrii Parkhomenko: We expect that the law could hasten the process of banks’ recapitalization, but the three-month timeframe for the moratorium might not be enough to make a decision on further stability of a bank, thus we could see more banks liquidated.