National Bank of Ukraine Governor Valeria Gontareva said that she had submitted her resignation to President Petro Poroshenko this morning, giving the government one month’s notice of her departure.
Gontareva’s last day at work will be May 10, should Ukraine’s parliament approve her resignation. “The reforms are done,” she said at an April 10 press conference with journalists at NBU headquarters in Kyiv.
The outgoing NBU chief didn’t say who would replace her, noting that she and President Poroshenko had discussed the matter three months ago and that she “gave her recommendations.” Her resignation follows months of rumors of her imminent departure.
Gontareva devoted much of the press conference to lauding her own and her team’s accomplishments, citing the nationalization of PrivatBank, the shutdown of more than 80 banks (about half of the nation’s banks) deemed insolvent, and the switch from a pegged to a floating hryvnia as key accomplishments that had “brought financial stability to Ukraine.”
“My mission is complete,” she added.
The changes came at a huge financial cost to Ukrainian taxpayers, who are on the hook for $20 billion in banking sector losses that are not likely to be recovered. In fact, despite the epic scale of the banking fraud, no one has been convicted of bank fraud in the nation.
Gonatarev added that the central bank’s “policy will continue” with the governance team she has moved into the bank since her tenure began three years ago.
Gontareva has attracted widespread support from foreign businessmen and international financial institutions like the International Monetary Fund and the World Bank.
Timothy Ash, an analyst at Bluebay Asset Management, called her tenure “transformational,” adding in a research note that her departure signals the beginning of “a tricky domestic political time for Ukraine, with the resignation of Gontareva being just one piece in the jigsaw.”
The IMF – which wired Ukraine a $1 billion tranche last week as part of its $17.5 billion lending program through 2018 – said that the NBU had “skillfully managed monetary policy,” and called for the government to “safeguard the NBU’s independence” going forward.
Among the candidates whose names have been floated to replace Gontareva, the front-runners are: Raifaissen-Aval CEO Volodymyr Lavrenchuk, Ukreximbank CEO Aleksandr Hrytsenko and former Prime Minister Arseniy Yatsenyuk.
Upon accepting Gontareva’s resignation, Poroshenko will have to submit his choice to the Rada, who will then approve it after accepting Gontareva’s resignation.
Although Gontareva has attracted public support from the West, reviews of her tenure within Ukraine are mixed.
The collapse of banks and subsequent loss of deposits above the Hr 200,000 ($7,420) state insurance limit has provoked protests from defrauded depositors.
There are also widespread allegations that the owners of collapsed banks have been allowed to withdraw money en masse from their financial institutions in the weeks leading up to their closure. Leaked October recordings of NBU Deputy Governor Kateryna Rozhkova appeared to show her falsifying capitalization data on banks, adding another wound to Gontareva’s tenure.
Ukrainian nationalists have accused Gontareva of favoring Russian banks in her efforts to clean up Ukraine’s banking system.
These accusations have aligned with the interests of some former bank owners, who appear to have used discontent with the NBU’s policy as a means of exerting political pressure on the bank’s leadership.
Some attacks revolve around the nationalization of PrivatBank in December. The bank was formerly owned by oligarch Ihor Kolomoisky, who, Gontareva said, loaned 100 percent of the bank’s corporate loan portfolio to companies linked to himself.
Gontareva complained of “political pressure” at the press conference, obliquely referencing an April 6 incident in which members of the Azov battalion-affiliated National Corps political party graffitied and blockaded Gontareva’s house, demanding her resignation.
The activists appeared with a film crew from 1+1, the Kolomoisky-owned TV channel. Gontareva said.
The outgoing NBU head also said at the conference that an audit of PrivatBank, commissioned by EY, had showed that Kolomoisky withdrew Hr 16 million ($593 million) the night before it was taken over.
Kolomoisky has denied allegations of self-dealing in relation to PrivatBank in the past, accusing the NBU of falsifying criteria used to measure the bank’s loan portfolio in a bid to take it over.
Rozhkova said that the NBU would release the full audit of PrivatBank in late April or early May.
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