USAID/Ukraine FINREP-II Final Report

The program aimed to increase financial sector stability and restore public trust in financial markets through technical assistance. FINREP-II's primary objectives were to strengthen supervision and regulation of the financial industry, develop financial and derivatives markets, and increase financial literacy for the general population. The program operated in a tumultuous political and economic environment, with the EuroMaidan Revolution significantly impacting the country. Despite these challenges, FINREP-II achieved its objectives through proactive and flexible technical assistance. The program worked closely with key regulators and government entities, including the National Bank of Ukraine, the National Securities and Stock Market Commission, and the Ministry of Finance. FINREP-II's work in strengthening supervision and regulation of the financial industry included reviewing over 400 drafts of legislation and regulation affecting the financial sector. The program provided extensive commentary to the government and stakeholders for improving and harmonizing legislation in line with EU standards and international best practices. FINREP-II also provided over 3,000 hours of training to financial sector supervisors on international standards and best practices. The program's efforts to develop financial and derivatives markets included drafting derivatives legislation that permits safe and transparent trading of agricultural derivatives, and later foreign exchange and other financial derivatives. FINREP-II also worked to establish a Ukrainian financial futures market. FINREP-II's work in increasing financial literacy for the general population included developing consumer rights legislation, creating a National Financial Literacy Strategy and Website, and expanding the Financial Literacy Course for students on a national scale. The program also conducted broad public outreach efforts to educate citizens on basic financial skills and consumer rights. The program's achievements were measured by indicators developed with USAID and incorporated into FINREP-II's Performance Monitoring & Evaluation Plan. A summary of achievements by technical area includes: * Legal and Regulatory: FINREP-II reviewed over 400 drafts of legislation and regulation affecting the financial sector, provided extensive commentary to the government and stakeholders, and provided over 3,000 hours of training to financial sector supervisors. * Government Debt Strategy: FINREP-II assisted the Ministry of Finance in assessing its government debt strategy, helped develop a strategy for coordinating crisis efforts with the National Bank of Ukraine, and published 114 issues of FOCUS, a USAID online newsletter on GOU debt and financial sector developments. * Pension Reform: FINREP-II remained the leader in technical assistance to the Ministry of Labor and Social Policy, the Pension Fund of Ukraine, and the Verkhovna Rada on pension reform, including developing actuarial projections and recommendations on a retirement age increase, contributions, and Pillar II precursors. * Deposit Guarantee Fund: FINREP-II developed a comprehensive Action Plan for the DGF to provide long-term technical assistance on procedures and internal regulations on bank resolution and guaranteed deposit payouts. * Anti-Corruption: FINREP-II led efforts to support the adoption of anti-corruption measures in the financial sector, including developing Corruption Prevention Plans for the DGF and NSSMC. * International Financial Reporting Standards (IFRS): FINREP-II worked with the Ministry of Finance to complete the incorporation of IFRS into the Ukrainian regulatory framework, delivered 16 regional seminars, and conducted over 13,000 hours of accounting and IFRS training for financial sector professionals. FINREP-II leaves a robust legacy for follow-on activities, particularly in concert with implementation of FINREP-II-created Roadmaps that set forth paths to reform on critical issues, including Securities Markets, Pillar II Pension Stability, Government Debt, IFRS, Commodity Derivatives, Financial Literacy, Women's Empowerment, and Anti-Corruption.