The parliament elected new chair of the National Bank of Ukraine (NBU) on June 19. For the first time in the history of Ukraine, a woman got this position, supported by 349 MPs (the support did not come easy, as the chamber twice took unscheduled breaks to work it out on the issue). “The monetary policy of the NBU... is different from the commercial banking, which I worked in for 20 years... It is a challenge for me, but my professional skills and knowledge of macroeconomics will be of help,” Hontareva said concluding her speech in the Verkhovna Rada.
So, who is the new head of the NBU and what do the bankers expect from her?
For the past seven years, Hontareva led the ICU, the largest company in the asset management and bond trading markets of Ukraine. She also served in management positions before in other financial institutions – ING Bank, Societe Generale, and (as a leading economist) at the Ukrainian Interbank Currency Exchange.
She is seen as a person close to president Poroshenko. It is said that being an investment banker, she, inter alia, helped him in the structuring of transactions on obtaining financing for Roshen’s business development in Russia. According to vice president of Ukrainian Credit Bank Union Borys Soboliev, the union’s member banks support the choice of the new head for the NBU and call her management style “liberal.” “Her strength is being a good team leader: she is able to build and lead a team... It is exactly what is needed to be done at the NBU... She has a perfect command of tools of monetary and credit market, so she will launch the currency market, which we lack now, and the currency risk hedging market. The lack of hedging is what prevents the NBU from letting the hryvnia-dollar rate float,” Soboliev said. In his view, Hontareva’s first task will be to clean the Augean stables of the NBU, to stabilize the exchange rate, and to make fully transparent operation of the interbank money market, making access to refinancing transparent, instead of provided based on personal connections.
According to chairman of the board of the Independent Banking Association of Ukraine Roman Shpek, the market received a “decent, professionally prepared, strong-willed person.” “She understands,” Shpek said, “what discourages investors from working with Ukraine, both at the macroeconomic and fiscal policy-making levels.” “Moreover,” he continued, “she is well aware of the problem of overregulation in the industry, sees systemic problems and imbalances.” According to the chairman of the board, the financial system expects continued reforms, less populism, more assertiveness and translation of the program of macroeconomic stabilization into specific reforms. It is also important to change the system of bank supervision, for the existing number of “bad” banks and the depth of the problems they have pose a serious threat. “She will have to implement more preventive measures to avoid a repetition of the current situation with a high rate of negative assets in the banking system,” Shpek concluded.
“Central banks are now responsible for the growth of GDP. If she is able to increase lending by 10 percent by the end of 2014, we can say that she is the right person for the job. If not, we will assist her at first, and then criticize her,” former deputy head of the NBU Oleksandr Savchenko told The Day when evaluating the presidential appointment. In his opinion, the second most important task for Hontareva will be controlling inflation.
