OREANDA-NEWS. The National Bank of Ukraine and market participants have discussed the issues related to business reputation assessment when making decisions on the appointment of bank senior executives or the approval of candidates for senior managerial positions. The meeting featured First Deputy Governor of the NBU Oleksandr Pysaruk, directors of the NBU’s relevant departments, representatives of the Independent Association of Ukrainian Banks (IAUB), Association of Ukrainian Banks (AUB), Ukrainian Credit Banking Union (UCBU), and some bankers.

In the course of discussion, the bankers and representatives of banking industry associations underlined that they are unable to establish an independent body responsible for carrying out an additional assessment  of bankers' business reputation for the following reasons:

 —    the absence of documents required to make appropriate decisions due to the restricted access to most documents;

—    a lack of unbiased criteria required to make appropriate decisions;

—    bankers' reluctance to risk their reputation when making decisions in the absence of access to the documents.

However, the NBU is not authorized to provide information about selected bankers to the independent body established by the banking community as the disclosure of this information is subject to restrictions imposed by applicable laws.

“Therefore, following discussions with bankers, we have arrived at the conclusion that business reputation assessment should rest with the NBU since the regulator has access to the findings of inspections and financial monitoring. In its turn, any banking association will be able to issue an opinion confirming that a candidate has an irreproachable reputation despite some evidence to the contrary. Based on this opinion and its own sources of information, the NBU’s collegial body will draw a final conclusion as to whether or not a candidate has an unblemished business reputation,” said Mr Pysaruk.

According to him, this will be the most appropriate and unbiased approach, which would enable it to start tackling the problem of assessing business reputation with due regard to special circumstances.

“The NBU and the Deposit Guarantee Fund (DGF) are in possession of information required to determine whether a banker is guilty or not guilty to the allegations of driving a bank into bankruptcy. Without having an access to such information, it would be irresponsible to decide who would and who would not secure the job” said Chairman of the IAUB’s Council Mr Roman Shpek. He emphasized that the NBU should take such decisions jointly with the DGF, whereas the issuance of an opinion will rest with banking associations.

As mentioned at the meeting, so far 800 individuals have been deprived of the opportunity to become banks' senior executives, of whom 620 individuals have been disqualified for three years and 180 individuals for 10 years. However, there is currently no alternative mechanism to evaluate business reputation of an individual, which would take into account special circumstances or facts.