Improving the valuation of insolvent banks’ assets in Ukraine: a new stage of cooperation between the State Property Fund of Ukraine and the Deposit Guarantee Fund

Ukrainian state authorities have taken an important step to improve the procedure for valuing insolvent banks’ assets. The State Property Fund of Ukraine (SPF) and the Deposit Guarantee Fund of Individuals (DGF) have signed a memorandum of cooperation to improve the process of valuing the assets of banks that do not fulfill their obligations.

According to the information provided by the press service of the State Property Fund of Ukraine, this document envisages joint work between the two funds on improving the valuation procedures for insolvent banks, banks under temporary administration, as well as those in the process of liquidation.

The memorandum aims to improve the methods of valuing the assets of the above-mentioned institutions, in particular, by combining the experience of the DGF. One of the main areas of cooperation is to finalize the methodology for independent valuation of bank assets. These measures should ensure a more accurate and transparent assessment of the value of assets of insolvent institutions, which will become the basis for further steps in the liquidation or restructuring processes.

In addition, the memorandum stipulates the development and implementation of an automated module for valuation procedures, which should significantly simplify and accelerate the valuation process. The creation of such a module will ensure a standardized approach to asset valuation and will increase the efficiency of both the SPFU and the DGF.

As part of this process, a working group will be formed to develop methodological principles for the implementation of the automated module. In addition, international experts will be involved in this work, which will allow taking into account the best global practices in the field of asset valuation of financial institutions.

These changes will contribute to improving financial stability in the country, as well as ensuring more efficient work of the bodies responsible for the liquidation of insolvent banks and the protection of depositors' rights. As a result of this step, processes related to asset valuation will become more transparent, faster and more accurate, which will allow state bodies to promptly resolve issues of financial institutions in difficult situations.