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DEPOSIT GUARANTEE FUND CHANGES THE ASSET SALES SCHEME (CE Ukraine)

This year the phrase “global financial crisis” came from the lips of world financial experts again, devaluation of hryvnia reached a record 300%. But it is hoped that the Ukrainian economy has already experienced the worst post-crisis period, since 2017 is the first year of economic growth after two years of falling. Today Ukraine needs better, and this calls for changes and reforms, and growth, which in turn requires investment.

Beginning from 2012, the Deposit Guarantee Fund has obtained desired changes – new powers in its work, which allowed to work with troubled banks. And with the onset of the crisis in Ukraine, the “bank-fall”, which neither banks themselves, nor depositors, nor the Deposit Guarantee Fund, which began to manage ¼ of the total GDP and had no idea of how to sell assets effectively, were prepared for, was launched.

As of today, the Deposit Guarantee Fund regulates activities of 93 banks, 89 of which are in the stage of liquidation. According to the deputy managing director of the Deposit Guarantee Fund – Svitlana Rekrut, by the end of 2019, it is necessary to complete the sale of most of the assets of bankrupt banks, for the whole period a catastrophically small number of assets from the total value were sold – 1.2%. This tendency was connected with the fact that the sales system was created from scratch and the market was not ready to work with them.

After analyzing the results of its work, the Deposit Guarantee Fund implemented a pilot project for the sale of bank assets with the use of the model of “Dutch Auctions”, operating the electronic trading system “ProZorro.Sale”. It is to be recalled that previously there were 33 private platforms guided by their own rules and individual software. It was difficult to control their work, and sometimes it was not even possible.

The peculiarity of this project is that within one day there will be an automatic decrease in price of a particular product until the first participant pushes the “buy” button. For comparison, earlier the price tag of a lot had a tendency to increase, which significantly delayed the bidding process and increased the number of its stages.

From now on, in one bidding day, the price of an asset may decrease from 100% to 20% of the stated nominal value. Also, in order to maximize the assets value, the Deposit Guarantee Fund will accept closed bids of quotations. With the new project, the number of bidders is unlimited, even if an auction is attended by one buyer who has made its bid, the bidding is considered successful.

Lots will be put up for sale both individually and as whole “pools”. By the end of 2017, it is planned to realize the following asset groups:

  1. Corporate loans (over UAH 100 000)
  2. Personal loans
  3. Mortgage loans
  4. Real estate

Experts believe that the new auction system is important not only for the economy as a whole, but also for business development. After all, now market participants can manage their financial flows better, knowing the exact date of the auction. Financial resources can be consolidated on the day of bidding, hoping that the market will react with other prices, because there is now the possibility of planning.

According to representatives of the platform “ProZorro.Sale”, the electronic trading market already has positive feedback from the participants, because there is now no interference in the auction process. For example, earlier, in the course of bidding, the “buy” button just disappeared or stopped working for a certain group of participants.

Therefore, taking into account a number of upgrades and innovations, the new sales scheme provides for eradication and systematic prevention of corruption, transparency of the tender process and open decision-making procedures.

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