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RESOLUTION OF BOARD OF THE NATIONAL BANK OF UKRAINE

of December 22, 2017 No. 141

About approval of the Regulations on implementation of assessment of stability of banks and bank system of Ukraine

According to Articles 6, of 7, of 15, of 55, 56 Laws of Ukraine "About the National Bank of Ukraine", Articles 66, "About banks and banking activity", for the purpose of assistance of financial stability, including banking system stability of Ukraine, respect for steady rates of economic growth and protection of interests of creditors and investors of the Board of the National Bank of Ukraine banks decides 67 and 70 Laws of Ukraine:

1. Approve Regulations on implementation of assessment of stability of banks and bank system of Ukraine (further - the Provision) which is applied.

2. Perform assessment of stability of banks and bank system of Ukraine annually as of January 1 of the year following for reporting since January 1, 2018.

3. To department of methodology (Ivanenko N. V.) after official publication to bring information on adoption of this resolution to the attention of banks of Ukraine and auditing firms which are included in the Register of auditing firms according to Regulations on procedure for maintaining the Register of the auditing firms having the right to carrying out audit inspections of banks, the Board of the National Bank of Ukraine approved by the resolution of November 17, 2011 No. 410, registered in the Ministry of Justice of Ukraine on December 19, 2011 for No. 1466/20204 (with changes).

4. To impose control over the implementation of this resolution on the vice-chairman of the National Bank of Ukraine To Rozhkov. Century.

5. The resolution becomes effective from the date of, its official publication following behind day.

Acting as chairman
Ya. V. Smoly

Approved by the Resolution of Board of the National Bank of Ukraine of December 22, 2017 No. 141

Regulations on implementation of assessment of stability of banks and bank system of Ukraine

I. General provisions

1. This Provision is developed according to the Laws of Ukraine "About the National Bank of Ukraine", "About banks and banking activity", Regulations on procedure for submission by banks to the National Bank of Ukraine of the report of the auditor by results of annual verification of the financial reporting approved by the resolution of Board of the National Bank of Ukraine of September 9, 2003 No. 389, registered in the Ministry of Justice of Ukraine on September 29, 2003 for No. 871/8292 (in edition of the resolution of Board of the National Bank of Ukraine of September 21, 2011 No. 341) (with changes) (further - No. Provision 389), other legal acts of Ukraine and regulatory legal acts of the National Bank of Ukraine (further - National Bank).

2. This Provision determines procedure National Bank of quality evaluation of active banking activities (further - assets), sufficiency (adequacy) of the regulatory capital, sufficiency of fixed capital (together further - capital adequacy) for the purpose of assistance of financial stability, including banking system stability of Ukraine by assessment of stability of banks and bank system of Ukraine to adverse changes in the macroeconomic circle.

3. The approaches determined by this Provision are based on provisions of the Directive 2013/36/EU of the European Parliament and Council of June 26, 2013 about access to activities of credit institutions and prudential supervision of activities of credit institutions and investment companies that makes changes to the directive 2002/87/EU and canceling Directives 2006/48/EU and 2006/49/EU; manuals of the European bank body about single procedures and methodologies of process observant check and assessment (SREP) (EBA/GL/2014/13, 19 December 2014).

4. The terms used in this Provision are used in such values:

1) the auditor - the auditing firm is included in the Register of auditing firms which have the right to carrying out audit inspections of banks according to Regulations on procedure for maintaining the Register of the auditing firms having the right to carrying out audit inspections of banks, the Board of the National Bank of Ukraine approved by the resolution of November 17, 2011 No. 410, registered in the Ministry of Justice of Ukraine on December 19, 2011 for No. 1466/20204 (with changes);

2) the audit report - the report of the auditor delivered in National bank according to requirements of the Provision No. 389;

3) the basic macroeconomic scenario - the complex forecast determined by National Bank of macroeconomic indicators for certain period in the future on the most expected succession of events which is used for implementation of stress testing of banks;

4) the size of uncovered credit risk - excess of size of credit risk over the size of reserves according to IFRS, determined according to requirements of the Instruction about procedure for regulation of activities of banks in Ukraine approved by the resolution of Board of the National Bank of Ukraine of August 28, 2001 No. 368, of Ukraine registered in the Ministry of Justice on September 26, 2001 for No. 841/6032 (with changes) (further - the Instruction No. 368);

5) the Report of the auditor on results of quality evaluation of assets of bank - the part of the separate Section of the report of the auditor on results of quality evaluation of assets of bank and the acceptability of providing on credit operations constituted according to requirements of the administrative act of National Bank which establishes evaluation procedure of stability of banks and bank system of Ukraine;

6) reporting date - on January 1 the year following after accounting year;

7) accounting year - the accounting period for creation of the financial reporting by banks (calendar year) which is subject to annual check by the auditor;

8) the adverse macroeconomic scenario - the complex forecast determined by National Bank of macroeconomic indicators for certain period in the future, considering probable macroeconomic shocks which is used for implementation of stress testing of banks;

9) assessment of stability of bank - assessment of capability of bank to provide observance, including in case of approach of adverse changes in the macroeconomic circle, the size of the standard rate of sufficiency (adequacy) of the regulatory capital (N 2) and the standard rate of sufficiency of fixed capital (N 3) at the level not below the normative and/or extreme values established by National Bank;

10) the current year - year in which assessment of stability of bank is performed;

11) forecast period - the three-year period from reporting date;

12) stress testings of bank - method of quantitative assessment of possible changes of quality of balance sheet and off-balance line items of bank owing to hypothetical, but probable changes in certain factors (macroeconomic indicators) of external environment.

Other terms which are used in this Provision are used in the values determined by the laws of Ukraine and regulatory legal acts of National Bank.

II. Evaluation stages of stability of bank

5. The National Bank annually as of January 1 of the year following reporting performs assessment of stability of bank on individual basis.

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