Press Release
The Government of Ukraine is doing its utmost to preserve the financial stability of the state during the war. For the first time in our history, we are facing the challenge of such a scale. The task of the National Bank of Ukraine (NBU), the Deposit Guarantee Fund, and the banking community during this time is to maintain the stability and efficient operation of the banking system of Ukraine.
The blanket guarantee introduced for the period of martial law will give the Ukrainians confidence that their savings are secured as long as the Government guarantees every citizen the return of his or her funds in full.
It is important to understand that the introduction of the full coverage for the bank deposits does not mean that there will be a need to payout all the deposits. Prior to the war, the banking system had a significant margin of financial strength, showed solid profitability, capitalization, and liquidity indicators. The state-backed banking system is able to meet the current challenges. The introduction of 100% deposit coverage for the period of martial law is an additional tool to support banks.
‘The National Bank of Ukraine supports the President’s initiative to introduce a 100% state guarantee for bank deposits for the period of martial law. Additional support for the depositors is a necessary and important step for the Ukrainians to be confident that their savings are secure. The depositors’ confidence, in turn, will help maintain the bank liquidity. At the same time, we have every reason to expect that the banking system is strong enough to withstand the powerful challenges of today,’ - said Kyrylo Shevchenko, NBU Governor.
‘Introduction of 100% deposit coverage, the so-called ‘blanket guarantee’, is a well-known practice. For example, this step was taken during the global credit crisis of 2008 in Ireland, Denmark, Iceland, and Germany, when for the period of crisis, in some countries up to 24 months, the state agencies guaranteed the full coverage of private deposits. This possibility is also provided for by the guidelines of the International Association of Deposit Insurers (IADI). The main task of this step is to ensure the confidence of Ukrainians in the safety of their savings, preventing in such a way the banking market disruption,’ said Svitlana Rekrut, Managing Director of the Deposit Guarantee Fund.
As of February 1, 2022, the total amount of household deposits (including sole proprietors) in the member banks of the Deposit Guarantee Fund amounted to UAH 658.3 billion.