Photo: National Bank of Ukraine, rospoint / Shutterstock
In recent years, the National Bank of Ukraine (NBU), as a guardian of financial stability and supervisor of the financial system, was continuously working on the improvement of the regulatory environment – introducing international rules for capital adequacy, liquidity, corporate governance, information disclosure and risk management within the Ukrainian banking sector, all in line with the Comprehensive Program of Ukrainian Financial Sector Development.
As the banking and financial sector in Ukraine has gone through significant transformation and fresh obligations arose under the EU-Ukraine Association Agreement, the EU integration aspirations of Ukraine fostered demand of the public and private sectors for new, transparent and uniform operating standards of the National Bank of Ukraine.
The Twinning project “Strengthening the institutional and regulatory capacity of the National Bank of Ukraine to implement EU-Ukraine Association Agreement” was implemented jointly by a Polish-Lithuanian consortium (Narodowy Bank Polski and Lietuvos bankas). It contributed to the pursuit of macroeconomic stability in Ukraine through institutional strengthening of the central bank and its role, and through supporting a reliable banking and payments infrastructure for economic operators.
The project enhanced NBU’s strategic planning and international cooperation capacities, as well as its capacity as a performer of the Supervisory Review Evaluation Process (SREP) assessments. Further, the Twinning partners helped facilitate the implementation of instant payments in line with the EU Payment Services Directive 2. It also identified the requirements to be met for Ukraine to join the Single Euro Payments Area (SEPA).
As a consequence of the Russian war of aggression against Ukraine, European Commission’s Directorate-General for Neighbourhood and Enlargement Negotiations authorised specific additional options deviating from the provisions of the Twinning Manual to enable much-needed flexibility in project implementation. In total, four Twinning projects continued their implementation in Ukraine after the invasion, highlighting the resilience of the instrument and the will of both the beneficiary and the implementing partners to continue cooperation.
Overall, this Twinning project not only contributed to the development of the role and operational capacity of the NBU, but also brought Ukraine closer to the integration of its banking and financial sector, and showed the resilience and determination of the Twinning instrument and all its partners.
Project title: Strengthening the institutional and regulatory capacity of the National Bank of Ukraine to implement EU-Ukraine Association Agreement
Project ID: UA 19 ENI FI 01 19, 2020-2023