In wartime, Ukraine could have maintained the stability of its banking system. However, bank lending is stagnating in both the corporate and private segments. Corporate lending is mainly driven by subsidized loan programs, while market lending is declining. Resumption of large-scale lending is crucial for businesses to adapt to the challenges of the debilitating war and for the economy to recover as quickly as possible. The focus of lending policy should be shifted to promoting the development of market-based lending, creating incentives for banks, and restoring the solvency and long-term sustainability of borrowers.<\/p>\n\n\n\n
The paper proposes measures aimed at reforming existing subsidized loan programs and reorganizing the banking system to remove obstacles to the development of market lending. The revival of market lending should restore the mechanisms of monetary policy transmission and allow the NBU to be more effective in anti-inflationary control.<\/p>\n\n\n\n
During the full-scale war, the National Bank of Ukraine’s (NBU) prudent regulatory policy ensured the stability of the banking system and its ability to provide basic banking services. Key stability measures were introduced through 100% guarantee of retail bank deposits, active refinancing of banks, adoption of regulatory norms that take into account the realities of war, and restrictions on foreign exchange markets to avoid speculation.<\/p>\n\n\n\n