Oleksii Semeniuk, Chairman of the National Securities and Stock Market Commission, published an opinion piece in Ekonomichna Pravda in which he explained how the launch of covered bonds could be an important step toward the development of the Ukrainian capital market and the creation of new opportunities for investors.<\/p>\n
This article discusses one of the oldest and most reliable financial instruments in the world, which has been used for over 250 years to raise long-term financing in European countries. Unlike many other debt instruments, covered bonds combine the liability of an issuing bank with additional collateral in the form of a separate pool of assets, providing investors with a double layer of protection.<\/p>\n
The column also explains why the National Securities and Stock Market Commission, in collaboration with the National Bank of Ukraine, authored a draft law that introduces modern rules for securitization and covered bonds in Ukraine in accordance with EU standards.<\/p>\n
According to Oleksii Semeniuk, the launch of this instrument will open up new opportunities for all financial market participants: banks will gain access to additional long-term financing to lend to the economy; institutional investors will gain a new, high-quality financial instrument; citizens will gain another reliable way to invest their own funds; and Ukraine\u2019s economy will gain additional sources of private capital for development.<\/p>\n
\u201cThe development of the capital market is not just about creating new financial instruments. It is about building trust. Trust by investors in the Ukrainian market, trust by businesses in their ability to raise capital, and trust by citizens in investing.\u201d<\/p>\n
The launch of covered bonds is one of the steps toward harmonizing Ukrainian legislation with that of the European Union and establishing a modern financial infrastructure necessary for Ukraine\u2019s postwar economic recovery.<\/p>\n