According to the norms of the Law of Ukraine “On Banks and Banking Activities”, a systemically important bank is defined as a bank that meets the criteria established by the National Bank of Ukraine, whose activity affects the stability of the country's banking system. Article 4 of the same Law states that the National Bank of Ukraine determines systemically important banks taking into account the following criteria: size of the bank, degree of financial interconnections, and areas of activity. In turn, the Regulation on the definition of systemically important banks, approved in the latest version of the Board of the National Bank of Ukraine, details the content and guidelines on which such criteria are based.
By the aforementioned Decision No. 79 of 19/06/2019, the NBU significantly expanded the list of indicators (previously criteria) that are characterized by criteria taken into account when determining the bank's systemic importance indicator. Along with the advent of the list of indicators, changes were made in the procedure for calculating the systemic importance of the bank, which now takes place in two separate stages, where banks that have not been identified as systemically important in the first stage have a chance to become such in the second. In this context, a separate indicator, a criterion called “bank direction”, is “guaranteed deposits of individuals”, the indicator of which can play a key role in determining the bank systemically important at the second stage.
It is worth noting that obtaining the status of a systemically important bank entails a certain burden in the form of additional requirements for each such bank. Among other things, the requirements should be highlighted, according to which systemically important banks should:
- Adhere to special values of economic standards, while maintaining the instant liquidity ratio (Н4) - at least 30 percent;
- Comply with credit risk standards, namely the maximum credit risk per counterparty (N7) - not more than 20 percent;
- Comply with increased requirements regarding equity, in particular, ensure the formation of a buffer of systemic importance, the size of which will be determined depending on the size of the indicator of systemic importance of the bank and its category.
We remind you that the norms of the above Regulation before obliged all systemically important banks to inform the National Bank of Ukraine about the opening of legal proceedings and making decisions on which banks could have a significant negative impact on their reputation and assets (more than 1%), - within 3 business days from the day banks receive the appropriate notice. Banks also pledged within the same period to inform the NBU about a conflict of interest in relation to the management of the bank. In addition, to systemically important banks were provided with a 14-day period during which the last one has to provide information on all issues considered at the general meeting of shareholders and decisions made regarding them.
In addition, the NBU Resolution №79 established that starting from June 19, 2019, the systemically important banks are added another obligation, which is to develop a plan to restore the activities of such banks in accordance with the requirements NBU's regulation on developing plans to restore banks.
The aforementioned, as well as other requirements, are placed on the bank, even after the loss of the status of systemic important for a period of 12 months from the date of loss of such status.
Recall that on the basis of the NBU decision of June 16, 2019 No. 79 “On amendments to some regulatory legal acts of the National Bank of Ukraine”, there were changes as a result of which the list of systemically important banks of Ukraine increased from 3 to 14.