Compensation of Ukrainian citizens' devalued savings at Sberbank

Українська

Outline

Several millions of Ukrainian depositors of the former state savings bank Sberbank (currently Oschadbank) are still waiting for compensation for their deposits that lost their value following the breakdown of the Soviet Union and hyperinflation in the early nineties. A final settlement of this issue would be extremely important for social, political, and economic reasons. But solving this problem is not an easy task. Total debt to depositors amounts to over UAH 130 bn, equivalent to almost 60% of GDP or to 260% of annual revenues of the central budget.

On June 5, 2003, the Round Table devoted to the problem of compensation of Sberbank devalued savings was held at the premises of the Institute for Economic Research and Policy Consulting. The event was aimed at discussing possible solutions to the problem and finding out optimal way out.

Competent specialists of different organisations participated in the Round Table: people's deputy, Head of the Committee for Social Policy and Labour, Vasyl Khara; people's deputy, Head of the sub-committee on state debt, borrowings and savings, Volodymyr Majstryshyn; representatives of the National Bank of Ukraine, members of the Special Committee on compensation of Oschadbank deposits, and representatives of international organizations.

Research Associates of the Institute presented a proposal reflected in policy paper S34, developed by the Institute and the German Advisory Group, concerning compensation mechanism and protection of purchasing power of compensation payments. The idea of proposed mechanism was assessed by present experts as one that sufficiently accounts of current economic situation and could be effectively implemented in practice. In the process of discussion participants of the Round Table identified a list of questions that require further elaboration. Among them are alternative sources of financing compensation payments, costs of implementation of different compensation mechanisms, and indexation of payments in the framework of existing comprehensive indexation scheme.

Programme

Chairman: Igor Burakovsky, Institute for Economic Research and Policy Consulting (IERPC), Director