National Bank of Ukraine

National Bank of Ukraine
Національний банк України
National Bank of Ukraine building

National Bank of Ukraine building

Headquarters Institutska street,9 Kiev, 01601
Established 1992
Governor Valeriya Hontareva[1]
Central bank of Ukraine
Currency Hryvnia
UAH (ISO 4217)
Bank rate 14.0%
Website www.bank.gov.ua

National Bank of Ukraine (Ukrainian: Національний банк України) is the central bank of Ukraine. Its headquarters building, constructed between 1902 and 1934, is located at 9 vulytsia Institutska (Institute Street), in Kiev.

History

Banking in Ukraine traces its history back to 1918 when on December 22, 1917, the Central Council of Ukraine adopted a law "On transformation of the Kiev office of the Russian State Bank into the Ukrainian State Bank". The law united all offices of the former State bank, Noble Land Bank, and Peasant Land Bank. At the same time there existed a decree of the Central Executive Committee of Ukraine about the nationalization of banks since December 14, 1917. On January 5, 1918, the Ukrainian State Bank started to issue its own money. On August 10, 1918, there was signed a statute on the Ukrainian State Bank. On August 23, 1918, there was established the State Land Bank.

At the end of the World War I, Ukraine became occupied by a new Russian regime - Bolsheviks. Bolshevist Russia adopted a law of War Communism which discontinued use of any financial institutions. However, in 1921 across Ukraine started to be established State Banks of the Russian SFSR which later were transformed into the Central Bank of the USSR.

Before the fall of the Soviet Union during the times of perestroika, the National Bank of Ukraine was a republican branch of the Central Bank of the USSR, while there were registered number of banks with various status. There were over 15 banks of ministerial status, over 20 banks of state/cooperative institutions, Moscow banks in Ukraine, banks with state status. Officially, the National Bank of Ukraine acted as the Central Bank of Ukraine since early 1991 (while part of the Soviet Union). Like institutions of many newly independent nations, it faced dire financial straits during the 1990s, leading to a prolonged period of hyperinflation.

On March 20, 1991, the Verkhovna Rada of Ukraine adopted the resolution "On Banks and Banking Activity", which became Law on May 1. The resolution declared ownership by the Ukrainian SSR of the Ukrainian Republican Bank of the State Bank of the USSR (later National Bank of Ukraine), the Ukrainian Republican Bank of the State Commercial Industrial-Constructional Bank of the USSR "Ukrprombudbank", the Ukrainian Republican Bank of the Savings Bank of the USSR, and the Ukrainian Republican Bank of the ForeignEconomBank of the USSR as well as the Ukrainian Republican Department of Encashment of the State Bank of the USSR.

Former President of Ukraine Viktor Yushchenko was Governor of the National Bank of Ukraine from January 1993 to December 1999, before becoming Prime Minister.

Legal status and structure

One of the bank's regional branches, in Odessa.

The legal status of the National Bank of Ukraine and the principles of its organization and activities are determined by the Constitution of Ukraine and the Law of Ukraine "On the National Bank of Ukraine".

The National Bank of Ukraine is a legal entity with separated property, which is the object of the state property. Its authorized capital amounts to UAH 10 million and is the state-owned property which is in the full economic competence of the National Bank.

According to Article 99 of the Constitution of Ukraine, adopted in 1996, the main function of the country's central bank is to ensure stability of monetary unit - the Hryvnia. To carry out its main function, the National Bank shall foster the stability of the banking system and, within its competence, the price stability.

According to the Law of Ukraine "On the National Bank of Ukraine", the National Bank is the central bank of Ukraine, a specific central body of the state administration, its issuing center which pursue common state policy in money circulation, credit, strengthening of monetary unit; it coordinates functioning of the banking system in general; determines exchange rate of the monetary unit against foreign currencies. The National Bank determines a kind of bank notes, their denomination, distinctive features and their protection system. The National Bank of Ukraine ensures the accumulation and custody of the gold and currency reserves and the conduction of transactions with them and the banking metals. The National Bank of Ukraine sets up the order of determining a discount rate and other interest rates; it gives permission for commercial banks' registration and licenses banking business; determines the standard of emergency funds for commercial banks and other financial and credit institutions.

The National Bank of Ukraine has the power to initiate legislation.[2]

The National Bank of Ukraine is governed by the Head of the National Bank of Ukraine and its directory, while its functions are coordinated by the Council of the National Bank of Ukraine. The council consists of 15 members including the Head of the National Bank as the ex officio position. The other members of the council are appointed by an equal quota of seven members from the President of Ukraine and the Verkhovna Rada.

Functions

1 Ukrainian hryvnia bill

According to the Constitution of Ukraine, the main function of the National Bank is to ensure the stability of Ukraine's monetary unit. To carry this out, the National Bank fosters the stability of the banking system and, within its competence, price stability.

The National Bank also carries out the following functions:

Governors of the National Bank of Ukraine

Since the bank's establishment, the following statesmen were the Governors of the National Bank of Ukraine (initially the title of the position was the Chairman of the Board of the National Bank of Ukraine)

No. Portrait Name Took Office Left Office
1 Volodymyr Matvienko 1991 1992
2 Vadym Hetman 1992 1992
3 Viktor Yushchenko 1993 2000
4 Volodymyr Stelmakh 2000 2004
5 Sergiy Tigipko 2002 2004
6 Volodymyr Stelmakh 2004 2010
7 Serhiy Arbuzov 2010 2012
8 Ihor Sorkin 2013 2014
9 Stepan Kubiv 2014 2014
10 Valeriya Hontareva 2014

On 24 February 2014, just after the "Maidan revolution",[3] the Verkhovna Rada dismissed Ihor Sorkin as governor of the National Bank of Ukraine and replaced him with Stepan Kubiv.[4][5] Kubiv himself was replaced by Valeriya Hontareva on 19 June 2014.[1] Hontareva is the first female to lead the bank.[6]

Council of the National Bank of Ukraine

Banking sector

There are more than 180 banks under the supervision of the NBU. Banks are divided into four categories depending on their capitals.[8] Since the fall of the Soviet Union there still exist few state banks. There are a couple of big banks owned through off-shore companies. Foreign banking is dominated from the Russian Federation, while the Austrian Raiffeisen Bank continues to stay strong.

Melitopol offensive anniversary

In October 2013, the National Bank of Ukraine has introduced a new commemorative silver coin on the 70th anniversary of the Melitopol offensive against German troops and the liberation of the city of Melitopol on October 23, 1943. The new coin is called "The Breakthrough of Soviet Troops Against the German Defense Line Wotan and liberation of Melitopol" and each of the 30,000 limited edition coins is worth $5.[9]

See also

References

  1. 1 2 Ukraine crisis: EU deal to be signed on 27 June, BBC News (19 June 2014)
  2. ↑ Rada Approves Cancellation Of Rule That Bans Deputies From Switching Factions, FINANCIAL (October 8, 2010)
  3. ↑ Ukraine: Speaker Oleksandr Turchynov named interim president, BBC News (23 February 2014)
    Ukraine protests timeline, BBC News (23 February 2014)
  4. ↑ Ukraine's parliament appoints new central bank chief, Reuters (24 February 2014)
  5. ↑ (Ukrainian) MPs changed the head of the National Bank, Ukrayinska Pravda (24 February 2014)
  6. ↑ Ukraine president gets parliament boost for peace plan, AFP news agency (19 June 2014)
  7. ↑ (Russian) Порошенко Петр Алексеевич Poroshenko Petr Aleksiyovych, ЛІГА.net
  8. ↑ Про розподіл банків на групи
  9. ↑ "National Bank of Ukraine issues commemorative coin". Cistran Finance. 21 October 2013. Retrieved 25 October 2013.

Dushkevych, N. and V. Zelenyuk (2007) "Banking in Ukraine: Changes Looming?" Beyond Transition Newsletter 17:2, (The Newsletter About Reforming Economies, THE WORLD BANK, 2007).

External links

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