Problematic Issues of Application of Discretionary Powers of the National Bank of Ukraine in Liquidation of Banks

Abstract

The article analyses the concepts of «discretion», «discretionary powers»; the right of the National Bank of Ukraine to perform law enforcement and control – supervisory activities is considered, taking into account the discretion in the right of decisions-making on the basis of professional (motivational) judgment. The purpose of the article is to analyses the concepts of «discretion», «discretionary powers» and their application by the National Bank of Ukraine, as well as to review the current legislation on the possibility of applying discretion in National Bank’s of Ukraine decision-making and, accordingly, identify legislative imperfections regarding banking license cancellation and liquidation of banks. Methodology. While writing the article, methodological tools were used in accordance with the stated goal of the study: scientific methods of system analysis and generalization, a formal logical method (to establish the essence of the concept of discretionary powers), a comparative legal method (to compare the laws of different countries regarding regulator’s decision-making regarding liquidation of banks), a statistical method (for analyses of statistical information on the market for the consumption of bank deposit services among the population), and functional legal method. Scientific novelty of the publication is to comprehend the problem of the broad powers of the National Bank of Ukraine in liquidation of banks, focusing on weak mechanisms for controlling administrative decisions by regulator officials, and the importance of balancing private and public interests when implementing powers. Conclusions. Providing the regulator with the possibility of widespread use of administrative discretion in matters of termination and liquidation of credit institutions is a high risk for the State and for citizens. In the long run for stabilizing of country’s economy it is important to improve staff skills and change the appointment of the heads of the National Bank of Ukraine; creation of mechanisms against improper decisions, as well as real opportunities to appeal and judicially protect against illegal decisions of the regulator; making appropriate changes to banking laws in respect of banks liquidation.