Ukraine Seeks to Align Financial Sector With EU Rules by 2028

Ukraine is accelerating financial sector reforms to bring its banking and insurance industries into line with European Union standards by 2028, central bank Governor Andriy Pyshnyi said.

The EU opened the first of six clusters in Ukraine’s accession negotiations on Monday. Kyiv hopes further negotiating areas will be opened later this summer.

Pyshnyi said the country’s banking regulations were about 78% aligned with EU requirements, up from around 50% before Russia’s full-scale invasion. Alignment in the insurance sector stood at roughly 55%.

The central bank is overhauling the insurance industry to make it more transparent, stable and attractive to investors. Pyshnyi said the banking sector remained profitable, liquid and well capitalized, while non-performing loans were near historic lows.

Ukraine is preparing more than 50 laws and legal acts to meet EU standards and strengthen its financial system.

The government and the World Bank estimate that recovery and reconstruction will cost nearly $588bn over the next decade. Kyiv expects private investment to become increasingly important as international financial aid gradually declines.

The central bank is also easing wartime foreign exchange restrictions and preparing legislation to revive the country’s capital market.

(reuters, max)