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 Privatbank nationalization to make banking sector stronger and more resilient, EU's Mogherini says

Privatbank nationalization should help ensure that all banks in Ukraine are held to the same prudential regulatory standards.

As reported by Censor.NET citing Ukrinform, this was stated by EU High Representative for Foreign Affairs and Security Policy Federica Mogherini following the meeting of the Ukraine-EU Association Council in Brussels on Monday.

"I know Prime Minister [Volodymyr] Hroisman very much wanted to be here as well. I spoke to him over the phone, but I know he had to stay in Kyiv today. Let me use this occasion to commend Prime Minister's, President's, Government efforts to restore confidence in the financial sector, as we have seen through a bold and courageous decision to nationalize PrivatBank," the EU High Representative said.

Read more: "Correct and courageous," - EBRD on decision to nationalize Privatbank

She noted that step should help ensure that all banks in Ukraine are held to the same prudential regulatory standards, making the banking sector stronger and more resilient. "It is also a vital component of larger reform efforts that the European Union together with international partners supports strongly," Mogherini added.

Read more: EBRD might take stake in Privatbank 'if all goes well,' - Reuters

On Dec. 18, the Cabinet of Ministers announced its decision to nationalize Privatbank, the largest privately-held bank of Ukraine. The government intends to issue 30-year domestic government loan notes worth 150 billion hryvnia ($5.54 billion) and become a 100-percent owner of the bank. The bank's first deputy CEO announced the decision was made after an unprecedented information attack on the bank and a threat it posed to its clients. The bank's leadership assured the clients their savings will be safe, naming it the key condition in the talks. In his turn, Minister of Finance Oleksandr Danyliuk confirmed the clients' money will be safe and protected by the state. Due to the nationalization procedure, Privatbank halted corporate transactions for one day, till 9 a.m. Dec. 20.

According to the National Bank of Ukraine, Privatbank needs 148 billion hryvnia in additional capitalization. The finance minister said that after Privatbank is stabilized, the state plans to sell it. In turn, President Poroshenko said the state guarantees safety and integrity of the client's funds.
   
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