From the time of its establishment as the central bank of the country in 1992, the National Bank of Ukraine has been actively cooperating with the IMF with a view to developing an effective internal structure and restructuring the banking system as a whole. This cooperation was mainly with the Monetary and Exchange Affairs Department and, on specific issues, with participating central banks of several Western countries. The objectives of such cooperation are, to a lesser or greater extent, common to the Baltic countries, Russia, and other countries of the former Soviet Union; therefore, I do not intend to dwell on this.

Technical assistance has been provided in the form of missions led by the Monetary and Exchange Affairs Department, with specialists in the main areas of central bank operations, visiting Ukraine two or three times a year. The mission makes recommendations and develops an action plan for their implementation. The subsequent mission then analyzes implementation of the action plan, makes necessary adjustments, and issues fresh recommendations. Between missions, when there is a need for it, the Monetary and Exchange Affairs Department sends specialists to provide advice on specific issues.

In this manner we have obtained specific and very useful assistance on monetary policy, economic analysis and statistics, balance of payments, foreign exchange controls, accounting, banking supervision, and banking legislation, and on the design of an electronic payments system.

This form of delivery of technical assistance has been reinforced by the opportunity given to our specialists to attend training courses on these subjects at the IMF Institute in Washington, the Joint Vienna Institute in Austria, and seminars at the Bank for International Settlements (BIS) in Switzerland.

Furthermore, the Monetary and Exchange Affairs Department has secured for the National Bank the services of a General Advisor from the Bank of England in 1993, and from the Deutsche Bundesbank in 1994. It has also made available an advisor on foreign exchange controls issues.

Overall, the technical assistance thus provided was effective, it coincided with our needs, and it relied on feedback. In other words, the constantly changing nature of our needs was taken into account.

One of the drawbacks has been the fact that, while receiving a fairly large number of invitations to training courses for our specialists, we are unable to make use of all of them since at this point only a relatively small number of our staff have sufficient command of English. It might be a good idea for a while to use the same level of funding on a reduced number of students, but provide interpretation into Russian, or even to organize short courses on banking English from time to time. This applies especially to the higher echelons.

There is significant bilateral cooperation with central banks of Western countries (Deutsche Bundesbank, Bank of England, Netherlands Bank, Austrian National Bank, and Bank of France) and of Eastern European countries (Poland, Czech Republic, Slovak Republic, and Hungary).

Another major potential provider of technical assistance is the European Commission under its program on Technical Assistance to the Commonwealth of Independent States (TACIS). After a successful TACIS tender bid, Dresdner Bank, in cooperation with its partners, carried out a study entitled “Banking System Restructuring Needs in Ukraine.” The final report has been submitted and is now under consideration.

The European Commission was also sent endorsements of acceptance of experts’ assistance in improving the operations of the electronic payments system, in the field of accounting, and in introducing the so-called Almaty plan of accounts. Unfortunately, we have not received a concrete reply yet.

Furthermore, the European Commission plans to fund technical assistance in setting up a banking institute in Ukraine, to be based at Kiev Economic University. Unfortunately, the procedure for granting technical assistance under the European Commission’s conditions (drawing up the terms of reference, recipient’s agreement, holding a tender bid) makes it impossible to use it if we want to obtain results promptly. As a rule, by the time funds are allocated, the terms of reference have become obsolete. It is impossible to revise them, however, since tender bid conditions cannot be altered. Under the present procedure, this assistance can only be used for fundamental long-term projects, such as setting up a banking institute.

Funds from the European Commission’s TACIS program could be put to more effective use through a simplified procedure under the auspices of the IMF, in line with the Group of Seven decision to coordinate technical assistance, the World Bank, or the BIS.

The National Bank of Ukraine also cooperates with the U.S. Agency for International Development on several technical assistance projects: setting up a skills improvement educational center for banking specialists (jointly with the Ukrainian Association of Commercial Banks); assisting in the establishment of and providing for the equipment for the Economic Research Center within the National Bank; and assisting in the implementation of the government securities market development project.

The United Kingdom is also providing technical assistance to the Bank through the British Know-How Fund and the British Council. These two bodies help with advice on how to improve the curricula of technical schools (the National Bank’s secondary education institutions) and act as sponsors for our specialists when they train at the Bank of England’s Education Center. In addition, they pay for the services of an accounting advisor to the Bank.

We also value highly the bilateral assistance of the Netherlands Bank in the area of banking supervision and on-site inspections, and of the Deutsche Bundesbank on payments system operations and foreign exchange controls.