World Bank provides US$500 million loan to Ukraine

YEREVAN, SEPTEMBER 16, ARMENPRESS. The World Bank’s Board of Executive Directors approved a US$500 million IBRD operation to finance theSecond Programmatic Financial Sector Development Policy Loanin Ukraine. This new financing supports a number of high-priority reform measures in the banking sector in response to the financial crisis in Ukraine.

In particular, reform measures supported by this loan – the second in a series of two – will strengthen the capacity of the Deposit Guarantee Fund to ensure that it can adequately perform its critical bank resolution and insured deposit payout functions in the case of bank failures.

“Armenpress” reports, referring to the website of The World Bank, that the loan will also help stabilize the banking sector through conducting diagnostics of the country’s largest banks and implementing recapitalization and restructuring plans for those banks that are found to be undercapitalized. Finally, this operation will support legal and institutional reforms necessary to improve the resilience and efficiency of the banking system in the medium to longer term, particularly, focusing on limiting related-party lending in the banking system.

The World Bank is a major development partner of Ukraine. With this new budget support operation, the Bank’s current financial support to the country amounts to aboutUS$4 billion.

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