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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

Viktor Suslov Claims NBU Malfeasance Established

20 April, 1999 - 00:00

By Vitaly KNIAZHANSKY, The Day
Next week the former Economy Minister and now People's Deputy Viktor Suslov
is to report to Parliament on the intermediate results of the inspection
of the National Bank (NBU) by the commission he heads. The situation is
embarrassing in that some people view the investigator himself as future
head of the institution.

Facts of illegal use of foreign currency reserves listed in a letter
from the Security Service of Ukraine have been confirmed, stated Viktor
Suslov, chairman of the temporary commission to investigate the National
Bank, in an interview with UNIAN. In his words, the commission had established
that the sum lost run into the hundreds of millions of dollars.

Commenting on Mr. Suslov's statement, "What are these loses?" NBU Director
for foreign currency operations Serhiy Yaremenko asked. "Does it mean they
were stolen? But I know that this just is not so. We answered in writing
many of Viktor Suslov's inquiries, but where he sees losses, I just don't
know."

Meanwhile, it is still not clear what kind of an institution the National
Bank should be and what role it should play in the nation's economy. The
law on the National Bank has not been passed, with issue of its independence
being the obstacle. The opponents of NBU independence tend to support their
position be referring to actual and fictitious shortcomings in the bank's
work.

NBU Governor Viktor Yushchenko, Infobank reports, has recently labeled
"fruitless" the debates now underway in Parliament and the government on
which is better: "to keep a stable hryvnia and have a dead economy" or
to sacrifice the stability of the national currency in order to replenish
the current assets of enterprises and give an impetus to economic development.
He is convinced that the National Bank should only perform regulatory and
not crediting functions (including emission). Mr. Yushchenko believes that
the NBU's main instrument should be the mandatory reserve requirements
for commercial banks and not the discount rate. Nor does Mr. Yushchenko
see any economic reason for a further reduction of the discount rate (in
April, the NBU cut it from 60 to 57%).

Prior to Verkhovna Rada hearings, The Day asked Commission [on
investigating National Bank activities] Secretary Volodymyr Fialkovsky
to inform readers about his colleagues' new "discoveries" (an interview
with him was carried by The Day, March 16).

V. F.: Our biggest discovery is that there is a great deal of
work to be done. Actually, what we have so far is more questions than answers,
although we do have some answers. We have uncovered facts and stumbled
onto such staggering amounts of money that the end of our work is even
farther away now than when we started. Moreover, even now the National
Bank gives us more subjects to broach. Under the law it was supposed to
revoke the licenses of 37 commercial banks failing to comply with the requirement
that their authorized capital stock be at least one million ECU. This monetary
unit is no longer in circulation, as you know. It has been replaced by
the euro. NBU submitted a draft Cabinet resolution whereby the bank will
stop controlling commercial banks in this respect. Of course, the draft
was rejected. We cannot have banks with $5 in capital. Deputy NBU Governor
Yaroslav Soltys said his bank, as the most competent financial authority
in Ukraine, considers that in the absence of the ECU the licenses should
not be revoked. I asked if this was the NBU's official stand. He replied
in the affirmative. My next question was what about excise and customs
payments? They are also in terms of ECU. Are there to be no payments from
now on?

For an exclusive interview with deputy chairman of the NBU inspection
commission Volodymyr Fialkovsky see page Day after Day
.

 

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