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Developingthedomesticsub-nationaldebtmarketinUkraineEng.ppt

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  • 1. Developing the domestic sub-national debt market in Ukraine: Key challenges and proposed action plan Workshop with Government, NBU, market participants, IFIs and donors Kyiv, March 6, 2007 Introductory presentation
  • 2. Welcome Acknowledgements
    • Ministry of Finance
    • National Bank of Ukraine
    • USAID ATCI
    • EU TACIS
    • Municipal Development Institute
    • Aval-Raiffeisen Bank
    • Financy & Credit Bank
    • Forum Bank
    • ING Bank
    • Kreshchatyk bank
    • Pryvatbank
    • Ukrsibbank
    • ARTA Invest
  • 3. Key impediments to development of domestic sub-national debt market
    • No reliable government bond yield curve
    • Limited SNG fiscal autonomy
    • Deficiencies in legal and regulatory framework for SNG borrowing
    • Distortions in structure of market incentives
    • Absence of SNG bankruptcy framework
    • Deficiencies in regulatory framework for CSEs
  • 4. Develop domestic government bond yield curve
    • Strengthen government debt management strategy (risk-based model)
    • Extend maturities and support liquidity of benchmarks
  • 5. Improve SNG fiscal autonomy
    • Improve SNG budget predictability
    • Develop own local taxes
    • Adopt comprehensive approach to inter-governmental fiscal reforms
  • 6. Improve legal and regulatory framework for SNG borrowing
    • Improve definition of SNG debt
      • Include payables in debt
      • Include guarantess at issuance and value guarantees at risk (Public Debt Law)
    • Progressively move from ex-ante controls to ex-post controls and market discipline
      • Keep ex-ante registration
      • Introduce automatic approval unless objection
      • Move to ex-post control through budget process
      • Relax debt limits for cities with credit rating
      • Keep ex-ante control for FX debt
  • 7. Improve structure of market incentives
    • Phase out Treasury loans, rely on SNG current account with private banks
    • Revise risk-weights used in calculation of banks capital adequacy ratios for SNG loans
    • Tighten controls on connected party lending between banks and SNGs
    • Do not impose credit ratings for SNG issuers or issues: let market decide
  • 8. Introduce SNG bankruptcy framework
    • SNG default
    • Workout
    • Recovery
  • 9. Reform legal and regulatory framework for CSEs
    • Apply full cost recovery tariffs (including cost of debt and equity)
    • Improve targeting of social protection schemes
    • Allow privatization of CSEs assets
    • Regulate PPPs, including UK-PFI type structures
  • 10. Thank you Contact point [email_address]

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