Struggle for National Bank Begins

The NBU Supervisory Board (with half of it to be elected by Verkhovna Rada before the recess and another two presidentially appointed members already delegated on July 2 by the eighth congress of the Commercial Banks Association) will in fact become the sole master of Ukraine's main money factory. Moreover, Parliament's volunteers to manage the NBU are in no way worried that the management model featured in the applicable law will make it impossible to adequately respond to the current situation on the Ukrainian money market, which is in principle clear, for the bank management amateurs are not obliged to bear responsibility for inflation or devaluation.

NBU Governor Viktor Yushchenko said at his latest press conference on July 12 that he was aware of what the legislators were guided by, intentionally putting off the hearing of a bill on changes to the law On the National Bank, but he failed to go into detail. "The pattern and ways of [Parliament's] behavior serve the goals set by certain political forces, which want to form a central bank management system but do not wish to revise the law," Mr. Yushchenko said evasively. However, addressing earlier the congress of the Commercial Banks Association, Mr. Yushchenko quite bluntly compared the NBU to a cooperative and gave an assessment of the fact that politicians and bankers had voiced their personal interests long before, when the current system of NBU management was still.

The NBU is quite unlikely to avoid becoming involved in the "abnormal relations" now pervading all state institutions having anything to do with money and finance. The question is: why should the NBU be in a better position than, say, the Ministry of Finance? For the latter, throughout all its history, has never fulfilled a single law on the budget capable of being implemented. The answer to this question should perhaps be sought somewhere in the realm of morals, not in the field of national politics and economics.

As to politics and economics (provided the unbending and unsinkable current chief banker Yushchenko does not resign), there could be several options, each of which is much better than a full-fledged implementation of the law On the National Bank. Firstly, Parliament fails to reach a consensus on the composition of its members on the NBU Supervisory Board. For instance, the Communists have already hinted that the NBU would not be "privatized" by other "cooperators," too, without their representative Serhiy Hurenko. Secondly, the board's fully-fledged operation might be blocked by the President. On the other hand, he is hardly likely to do this: he already had a chance to veto the law, but certain interests prevented him from doing so. And, finally, NBU professionals seem to be getting ready seriously to prove at the Constitutional Court, with charts and tables in hand, that the "legitimized" system of NBU management is incompatible with a stable hryvnia.