Ukraine has invested $15.5 billion to prop up its state-owned banks since 2008 and could keep spending without improving the quality of corporate governance in banks and their supervision, Managing Director for Eastern Europe and the Caucasus at the European Bank for Reconstruction and Development (EBRD) Francis Malige wrote on his Facebook page.
He said that $5.8 billion was injected in capitalization of PrivatBank, $3.5 billion – Oschadbank, $2.8 billion – Ukreximbank, $1.6 billion – Rodovid Bank, $1.4 billion – Ukrgasbank and $0.5 billion – Bank Kyiv.
“That does not even count the cost of the failed banks that were transferred to the Deposit Guarantee Fund,” Malige said.
He said that as long as the governance and supervision of banks is not fixed, the tab will only keep rising.
“The current set up is not robust enough to prevent further connected lending. Ukraine needs the law on state banks,” he wrote.
As reported, Ukraine’s Verkhovna Rada on June 21 sent bill No. 8331 on the reformation of supervisory boards of state-owned banks for repeated first reading.
