Kyiv, Ukraine, January 31, 2011—
IFC, a member of the World Bank Group, is cooperating with a Ukraine stock exchange, Perspektiva, to support development of a market for distressed assets and stimulate recovery of the banking sector, thereby helping banks to resume lending.
IFC’s Financial Markets Crisis Response Program in Europe and Central Asia and Perspektiva in 2011 and 2012 plan to disseminate ways and means that allow banks to enhance liquidity. IFC and Perspektiva will develop recommendations to improve regulation and set transparent rules and standards for participants in the secondary distressed assets market.
“These measures will help banks improve the quality of their loan portfolios,” said Stanislav Shyshkov, Director of Perspektiva. “Sales of distressed assets via the exchange is an effective way to enhance liquidity and improve their balance sheet, and thus support banks in their recovery from the financial crisis, reinstate banks’ credibility and help them resume lending.”
The cooperation will focus on bad asset evaluation standards, disclosure standards for financial institutions and qualified investors, turnover of securities issued in the process of distressed assets securitization, easing requirements for listing of such securities on the exchange, and tracking sales of distressed assets.
“This is the first time IFC has supported the development of a securitized instrument for distressed assets in cooperation with a stock market,” said Garth Bedford, head of the IFC’s Financial Sector Crisis Response Program in Europe and Central Asia. “This is an important step towards helping banks to resolve their distressed assets problem through the development of alternative platforms for their disposition. Strong and healthy financial institutions in Ukraine will be able to give access to financing for the real sector, thus helping to create jobs and open new opportunities for the economy.”
IFC’s Financial Market Crisis Response Program in Europe and Central Asia was launched in 2009 in partnership with the Swiss State Secretariat for Economic Affairs (SECO).
PJSC Stock Exchange Perspektiva was founded in 2006 to organize broad trading with securities in Ukraine. With charter capital of UAH 50 million, in 2010 Perspektiva ranked as Ukraine’s second largest exchange by trade volume, with a market share of 27.8 percent.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in developing countries. We create opportunity for people to escape poverty and improve their lives. We do so by providing financing to help businesses employ more people and supply essential services, by mobilizing capital from others, and by delivering advisory services to ensure sustainable development. In a time of global economic uncertainty, our new investments climbed to a record $18 billion in fiscal 2010. For more information, visit
www.ifc.org
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