National Bank of Ukraine introduced a question of creating the bank "bad assets"

The National Bank of Ukraine introduced a question on the establishment of the bank's bad assets. " This was stated by deputy head of the National Bank of Ukraine Igor Sorkin. He stressed that establishment of such institutions to overcome the crisis of distressed assets is quite common international practice. "Such an approach to improve the banking system, in our view, will reduce the burden on capital, reduce the amount of time, money and effort required for the maintenance of distressed assets, will provide banks the opportunity to return to normal operation and focus on its core functions, particularly turn on lending to the economy ", - said I. Sorkin. According to the deputy head of the NBU, if before the crisis, the share of problem assets was 2.5% as at 1 April 2011 it reached 15% of banks' assets. He stressed that the accumulated bad assets adversely affect the regulatory capital of banks hamper the resumption of lending to the economy and are a significant obstacle to economic growth and improve the country's investment attractiveness. "Today, banks are very wary of lending and mainly invested in government securities, which, although they have a low yield, but are risk-free", - said I. Sorkin, adding that the decision on troubled assets of banks provided economic reform program of President Ukraine for 2010-2014 and identified one of the priorities of the NBU. Source: Ministry of Industry