In the rarefied world of central bankers, Stepan Kubiv stands out.
A couple of weeks ago, Mr. Kubiv was one of the leaders of Ukraine’s protest movement, called Maidan. He spent months organizing supplies for thousands of protesters, taking on police and occasionally shouting “death to the enemies” from a stage in Kiev’s Independence Square.
Two days after ousted president Viktor Yanukovych left for Russia on Feb. 22, the new government turned to Mr. Kubiv, a former banker, and asked him to become governor of the National Bank of Ukraine. Now his duties are nothing less than rescuing the country’s financial and banking systems.
He may have shed his helmet and flak jacket for a business suit, but the revolutionary fire still burns. His office is only a couple of blocks from where more than 80 people died last month in clashes between protesters and police. The barricade where dozens of fellow Maidan supporters were shot still stands, covered in flowers and makeshift memorials.
“I maybe sound emotional and I want to be very frank with you,” Mr. Kubiv said intently through a translator after meeting with reporters on Thursday. “I held 26 dead people when I was on Maidan, in my hands, and one of them was an 18-year-old boy and now when I’m in this position, I look at this job from a different perspective. I feel more responsible for what I do than ever before. Because the price that we had to pay, all the lives of these young boys…” He left the sentence unfinished.
Mr. Kubiv, 51, is no novice to the financial world. He’s a mathematician and economist who spent 15 years as an executive at several Ukrainian banks before turning to politics and winning a seat in the country’s parliament for the main opposition party called Fatherland. He joined the protest movement last November, shortly after a group of students was attacked by police in Independence Square for demonstrating against the Yanukovych government. The attack sparked the Maidan movement and, for the next three months, about 20,000 people stayed in the square, setting up tents, building barricades and battling riot police.
Mr. Kubiv and a former banking colleague, Bogdan Dubas, became “camp commanders,” charged with keeping the people supplied with food, water, electricity and warm clothing. They also organized trash collection, toilets, firewood, medical services, security and paid rent on as many as seven buildings occupied by protesters. All were financed by donations from around the world.
After he was named governor of the central bank, Mr. Kubiv resigned his seat in parliament and handed his Maidan responsibilities to Mr. Dubas.
His task now is more daunting. The country’s banking system, run largely by cronies of Mr. Yanukovych, is in crisis and there are fears some could go under. The value of the currency has plummeted, leading many deposit holders to pull out their cash in the hope of buying dollars or euros. Deposits at some banks have dropped by as much as 15 per cent. And then there’s Crimea.
The Crimean government has said it plans to take over all Ukrainian assets after Sunday’s referendum on joining Russia, which is widely expected to pass. That leaves Mr. Kubiv struggling to figure out how to keep the more than 1,000 bank branches in the territory operating. Already, moving cash in and out of Crimea has become so difficult several banks have limited withdrawals to 200 hryvnyas, or about $24.
As for the country as a whole, Mr. Kubiv said the bank is working with the International Monetary Fund and others on introducing reforms and shoring up the financial sector. There have been reports as many as 53 of the country’s 181 banks are in trouble, a figure Mr. Kubiv played down. He said his office has conducted inspections on 15 and will have results soon. And he stressed that the central bank provides deposit protection for up 200,000 hryvnyas, or $24,000, if a bank collapses.
Mr. Kubiv knows there is much to do. He wants management changes to weed out corruption, and he wants to institute stress tests on balance sheets and new regulations to make it harder to open a bank. “It’s not advisable that every businessman here in the country owns banks,” he said. “There has to be consolidation.” He’s also talking with European private equity funds that are interested in buying banks and other assets.
The bigger challenge is encouraging the public to keep faith in the country’s financial institutions. “We understand that all this nervousness and all this emotion in our society impacts the banking system,” he said. “We are aiming for some serious reforms.”
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