Ukraine: Technical Assistance Report-Review of the Counterparty Eligibility for Monetary Policy Operations and the Emergency Liquidity Assistance Framework

Technical Assistance Reports, June 25, 2025

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The IMF’s Monetary and Capital Markets Department conducted a technical assistance engagement with the National Bank of Ukraine (NBU) to enhance the NBU’s counterparty eligibility criteria for monetary policy lending operations and strengthen its Emergency Liquidity Assistance (ELA) framework.
The mission undertook a comprehensive review of the NBU’s counterparty eligibility criteria and recommended integrating financial soundness assessments to ensure only solvent entities are eligible, thereby mitigating systemic risks.
The mission recommended implementing access limitations or suspension measures for counterparties that do not comply with solvency requirements; these measures should be as automatic as possible and operate within a clear regulatory framework.
The mission recommended expanding the types of collateral eligible for ELA operations to encompass assets that are also eligible for monetary policy operations.
The mission emphasized improving internal procedures, decision-making processes, and operational readiness to ensure timely access to emergency liquidity for solvent banks.

Counterparty eligibility should integrate financial soundness assessments to restrict participation to solvent entities and mitigate systemic risks.
Automatic access limitations or suspension measures are necessary for counterparties not meeting solvency requirements, within a clear regulatory framework.
The existing ELA framework requires strengthening to enable rapid responses to potential liquidity crises.
Expanding collateral types for ELA to include assets eligible for monetary policy operations would support operational flexibility during crises.
Internal procedures, governance, and operational readiness need improvements to deliver timely ELA to solvent banks.

Integrate financial soundness assessments into counterparty eligibility criteria for monetary policy lending operations.
Implement access limitations or suspension measures for non-compliant counterparties; design these measures to be as automatic as possible and embedded in a clear regulatory framework.
Expand eligible collateral for ELA operations to include assets that are also eligible for monetary policy operations.
Strengthen internal procedures and decision-making processes related to ELA to improve operational readiness and speed of response.
Ensure frameworks prioritize timely access to emergency liquidity for solvent banks while maintaining safeguards to prevent moral hazard and systemic risk transfer.

Subjects: Asset and liability management; Collateral; Financial crises; Financial institutions; Financial sector policy and analysis; Financial sector stability; Lender of last resort; Liquidity; Loans.
Keywords: B. ELA regulation; Central Banking; Collateral; Counterparty Eligibility; Crises Management; ELA master agreement; ELA request; ELA timeline; Emergency Liquidity Assistance; emergency liquidity assistance framework; Financial crises; Financial sector stability; Global; Lender of Last Resort; Liquidity; Loans; Monetary Policy Operations; Ukraine.