If there are two things to remember about banking in Ukraine in 2015, they would be that its problems are older than the recent strife and that the National Bank of Ukraine (NBU), the country's central bank, is finally an active force for reform. But even if banking regulation, enforcement and communication have undergone irreversible change, the industry still faces a bewildering array of macroeconomic, security and corruption risks. In light of the country’s struggle, what would normally be a radical but predictable reform process transforms into the challenge of a lifetime.
The environment for launching reform could hardly be worse. According to the State Statistics Service of Ukraine, year-on-year core inflation stood at 44.6% in March 2015. The hryvnia, the national currency, plummeted in February 2015 by as much as 47.5% compared with January before, recovering in March at ‘only’ one-third down for the year. This is following a 50% drop in 2014.
